Demand Duplication: Header Bidding’s Dirty Little Secret

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Header bidding is one of the greatest paradigm shifts ad tech has ever seen. In 2017, header bidding transformed the landscape thanks to ubiquitous adoption by publishers, who deconstructed their vertically-configured ad stacks and rebuilt them in a horizontal alignment. In doing so, bid density increased and high-value bids buoyed to the surface rather than get lost in the waterfall.

Header bidding displaced Google as an intermediary and suppressed the asymmetrical outcomes of dynamic allocation. Ultimately, header bidding succeeded because it offered a technical tourniquet for publishers: they used it to slow the revenue bleeding incurred by the constant attacks on their businesses. As such, a bidder feeding frenzy emerged, which left publishers with a new challenge: which bidders to implement?  

Before we dig into this question, let’s rewind to 2014. At that time, the only two players transacting in the header were Criteo and Amazon, and publishers were categorically opposed to third-party code on their pages outside of DMPs and ad servers. Criteo and Amazon, however, were granted an exemption to this rule, for one sole reason: they had unique, premium demand at high CPMs that publishers couldn’t get anywhere else.

Fast-forward to 2017. While publishers considered unique demand, particularly from specialized vendors, it wasn’t the driving factor behind larger programmatic and/or SSP partnerships. Instead, they focused on considerations such as latency and line item set up. Realizing the need for demand diversification, the SSPs tried to carve out budgets from the DSPs and trade desks that were solely “reserved for the SSP’s header inventory.” While there was a ton of buzz around this concept, did publishers actually see these campaigns materialize, or did the budgets get lost in a pile of broken PMPs and lofty lingo?

Ultimately, what is actually left in the header is demand duplication, because everyone has the same buyers. This can be detrimental to the demand side and has led to the insurgence of supply chain optimization conversations – buyers understandably don’t want to bid against themselves.

Let’s not lose sight of the big picture. It’s time for publishers to hit the reset button, simplify, and remember why in 2014 they had just two partners in their header: unique, premium demand.

Nativo’s unique demand is born from our direct relationships with premium advertisers, which arms our publisher partners with high-quality, competitively-priced revenue streams.

 

Written By:

 Taylor Farmer Director, Business Development Nativo

Taylor Farmer
Director, Business Development
Nativo