The latest EHS 90@90, moderated by Founder and CEO, R.J. Lewis, discussed the importance of getting started with header bidding: what it is, featured expert spotlights in the world of header bidding, considerations for how to get started, and new trends in the tactic. After a brief introduction of Camille Fraczek, Publisher Development Account Manager at EHS, the webinar kicked-off with defining what exactly header bidding is.
Defining Header Bidding
Understanding the concept of header bidding is central to understanding how programmatic ad buying works.
“Header bidding is a way to auction off inventory in real time.” It’s a giant auction for every impression, on every page, on every moment that loads. As soon as a page loads, a piece of code in the header of your page calls an auction that reaches out to bidders through supply side platforms (SSPs) or demand side platforms (DSPs) calling out an impression. Advertisers are specifically looking for information about a specific user at that moment they are on the page. Most of programmatic trades on data of the end user, among other factors like content on page, etc.
Header bidding increases at that moment when someone is at the buying decision. From the perspective of the pharmaceutical advertiser, every pharma company greatly values its high prescribing physicians and are willing to bid higher during those moments when the physician is at the “buying decision.” Likewise, pharma companies greatly value patient populations, paying special attention to the geographical location and the likelihood of a patient having a particular condition.
Client-side header bidding vs. Server-side header bidding
While not the focus of this webinar, it is worth mentioning and defining server-side header bidding (SSHB), how it differs from client-side and its benefits. SSHB differs from CSHB in that the requests are sent from a server rather than from the end user’s browser. Its major benefit is that it offers publishers the advantages of header bidding but saves a lot of problems (and time) that are associated with the process, particularly latency as R.J. mentions. The drawback of SSHB is that it doesn’t allow for the same visibility – it occurs in a server where the only thing that comes out is the winning bid. SSHB also doesn’t allow for the cookie-matching that CBHB does, requiring a whole different process of identifying an advertiser’s ideal audience to take place. CSHB is used far more and therefore is recommended now, something that may change several years down the road.
Introducing the Identity Graph – Potential Solution to a Cookie-Less World?
We all know that by 2023, 3rd party cookies will be going away. A potential solution to a cookie-less future is the “identify graph” that basically tries to create a complete picture of a user based on online and offline data points. In a cookie-full world, about 65-to-85% of the universe is mapped, at least in U.S. terms. Although there is still a little over a year to prepare for a cookie-less world, the identity graph at best is mapping around just 25% so there’s still a long way to go with finding a solution to such a major shift in how data is captured.
Benefits of programmatic header bidding
One of the key benefits of programmatic header bidding is it nicely fills unsold inventory and competes with direct sold, in many cases. While no one is saying you will have 100% sell through, programmatic gets ridiculously close where there is always someone willing to bid something. Some other benefits include the ability to better understand the advertising marketplace, the ability to sell sponsorships and packages at a premium, increases in revenue ad impressions, and more.
Addressing the Biggest Concerns (some turned myths) of Programmatic Header Bidding
Many of the common concerns that have already been widely addressed by the industry are this idea that with programmatic header bidding, you’re releasing access and control over your ad inventory. Opening to the marketplace to let anyone bid does seem and feel a bit risky. One of the biggest hurdles for many of EHS’s publishers is not having the ability to pre-approve every advertiser. Though, the upside is you are opening yourself up to more potential advertisers. Other valid concerns are commoditizing premium inventory, low CPMs, poor ad quality, and latency issues which diminish the user/audience experience. This is improving though.
To reiterate these points in the real world, the webinar turned to Fabien Savenay, President of Quaestio Consulting and Former VP, Global Sales at Wolters Kluwer Health, who shared his changing thoughts on programmatic over the last decade.
“As a digital publisher in advertising, my main objective is to find ways to diversify ad revenue on my platforms by leveraging my audience as well as my content. That’s why, for the last 10 years I’ve been looking into programmatic advertising as a way to achieve these objectives.” Fabien shared a lot of the concerns stated above that he has had over the years. Today, Fabien is working with different types of programmatic vendors and those past concerns have greatly diminished. He now feels that he is working with a partner, an extension of his sales team, to optimize and maximize revenue by selling his own inventory. With the programmatic market experiencing a massive growth, Fabien advises to seek out a partner, or an organization, who really understands your market. If you want to safely diversify your revenue, programmatic is the way to go.
The Future is Header Bidding
R.J. calls the next slide “the most important” as it explains why you will want to make the switch to programmatic. It’s simple – this is where advertising spending has gone and will continue to go. By looking at the graph by eMarketer, today, programmatic is about 85% of all display advertising. Even pharma, the known laggard in the digital space
While the growth rate is expected to slow down, programmatic digital display advertising is expected to continue to grow over the next several years. This represents a very significant market and this is where the dollars are from the advertiser perspective, so you might want to hop on this trend if you haven’t already.
When it comes to programmatic, advertisers are buying all different platforms from desktop and mobile web to mobile in-app, in-stream video and even native ads. This is more than a trend that you can choose to or to not ignore. R.J. believes that the future will lie within the framework of an auction-like environment.
Solutions to Past Big Concerns
We picked up some more perspective on programmatic header bidding from Kyle Nelson, Account Director at the programmatic platform, Xandr, who agreed that programmatic has come a long way in the past seven to eight years. As mentioned earlier by R.J. and Fabien, latency was a major concern within the technology when people were first figuring out how to use programmatic header bidding. Over the last decade, the tools have evolved in a way that has given the publisher control over latency issues on their own pages. More recently, over the last 5 years, even more tools have come into play that are further mitigating latency issues and now it isn’t much of an issue at all.
Kyle told us that another common myth about programmatic advertising is this idea that it is a “black box” where there are gaps in knowledge about who is bidding on inventory and the types of ads that are being displayed. Like the problems with latency, many strides have been made around transparency and it’s something the industry has taken very seriously. Tools like Ads.txt, an initiative put forth by IAB, are helping publishers overcome any lack of transparency by ensuring that their inventory is sold through authorized dealers and patterns. Ads.txt gives control over who sells their inventory, helps prevent counterfeiting, and gives buyers confidence when they’re purchasing approved inventory.
Recommendations on How You Can Get Started with Programmatic Heading Bidding Today
After laying out what programmatic header bidding is, how it works, and how far it has improved over the last 10 years, here are a few things to think about before getting started:
- Be prepared that these advertisers go beyond healthcare. Be prepared to see auto and hotel ads, for example, because you’re being opened to the world where every individual has different value to different people. Be prepared to see a lot of retargeting ads and you’ll see these on your own website because auctions are happening in real time.
- Programmatic header bidding requires a changeover in ad tags and while that is sometimes a heavy lift for publishers, it’s not really that difficult.
- It’s important to remember that changing ad tags creates an opportunity to explore new ad tags across the board, including other units such as video, native, interstitials, and adhesions. Google once punished sites for running interstitials, but they are now back, and Google has even endorsed them as long as they are done appropriately. Not only are they back but they are also high revenue generators. Adhesions ride over the top of the content and also poses as a very popular driver for bidding because of its high viewability and placement.
We hope that this recap of the latest 90@90 has provided you with a sense that programmatic header bidding is a win-win all around. In the advertising operations space, it has been a major technological breakthrough, opening up and evolving the process of ad buying while giving publishers greater control, more transparency, and higher revenue from their ad inventory. Just as importantly, advertisers benefit by having greater access and visibility of the publishers’ ad inventory and allows them more opportunity to bid on premium inventory.