Article

Eli Mandelbaum
Eli Mandelbaum 10 August 2016

Header Bidding: Where Is It Now And Where Is It Going?

Let’s start with a question: What is header bidding? As its popularity continues to rise, more and more people have become interested in the answer to that question.

Header bidding was created as a hack of sorts to compete with what some describe as Google’s “ad tech monopoly.” It allows publishers to sell their digital advertising units at a higher price by using a programmatic bidding system that offers inventory to multiple ad exchanges simultaneously before making calls to ad servers (such as Google’s DoubleClick for Publishers). This is done by inserting a special piece of code into the header of their web pages — which is where the “hack” classification comes in.

In a recent PluggedIn BD roundtable, we invited founders, CEO's, and industry executives from publishers and adtech startups to come together and share their thoughts on header bidding — or as some described it, “programmatic 2.0.”

Where We Are Now

Most of our participants agreed that header bidding is taking both the publishing and ad tech industries by storm. Many were already using it and the rest were planning to in the near future. As one panelist explained, header bidding is dynamic because it always competes (and wins) against the existing ad stack. This has contributed to a universal ad lift. It also gives publishers more visibility around what inventory is worth and more control over how it is priced. Because of these results, many on the publishing side are anxious to fully understand and implement header bidding.

The Challenges

As with all new technology, header bidding brings its own set of challenges — many, in fact. The largest areas of concern fall under technology and transparency. In terms of technology, many publishers do not have the in-house development teams to interpret and work with the code. Then there is the issue of how header bidding affects the current ad stack. Finally, the number one set back, according to our panel, is latency.

The second round of challenges brought forward center around a general lack of knowledge when it comes to header bidding. This is where transparency comes into play. Publishers want to know more about how it works, how to use it effectively, and how it will change metrics. Thus leading to the realization that ad tech needs to make their platforms and offerings easier to understand, publishers need to consider expanding their teams to include individuals who have experience in this space, and a reporting standard needs to be developed and agreed upon by both sides.

Where We Are Headed

As with any growing trend in tech, we asked our panelists: “What’s next?” Many believe the next evolution is going to come in the form of service — helping publishers understand how to optimize, not just implement. Ad tech companies will provide more front-end controls which will enable publishers to make updates on their own, without a development team.

Another focus will be experimentation. We know header bidding works with basic ad units, but how will it do with other types like video and mobile applications? Early signs point towards success, but it will take further adoption and insight to measure and develop the technology accordingly.

While there is plenty of work to be done, most of the experts agree that header bidding is the future of programmatic advertising and it’s time to get more players involved.

Have you used header bidding yet? Share your experience in the comments below.

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