• by Laurie Sullivan  @lauriesullivan, April 13, 2016

Google has begun testing exchange bidding in DoubleClick for Publishers (DFP) allowing other partners that a publisher might work with to compete for impressions by making real-time bids through a feature called dynamic allocation.  The move will eventually allow Google to better support the real-time bidding process on the mobile Web and in mobile apps.

Dynamic allocation in DFP allows Ad Exchange to compete in real-time with line items booked in DFP as either remnant or guaranteed advertising inventory. It automatically determines the best ad to serve at the best price. Now when the request comes into DFP, Google will simultaneously accept Ad Exchange programmatic buyers and other exchanges the publisher chooses to work with.

Google's move will eventually support the ad industry's shift to mobile and the need to provide answers through advertising in the moment. Jonathan Bellack, director product management at Google, told Search Marketing Daily, that the move will greatly support mobile, more than desktop.

"A lot of the thinking here is that client-side code is more challenging on mobile devices than desktop where there's less memory, less processing power and bandwidth, and you're dealing with battery life," Bellack said. "It makes more sense to do that on the server side rather than effectively imposing the costs on the consumer by forcing the device to make a whole bunch of extra calls to the ad server."

When Bellack talks about exchange bidding on mobile he calls it "early days," but expects the process to work for the mobile Web and mobile apps as well as it does for desktop. "it's something we have started working on, communicating with the industry because we think there's needs to be some sort of discussion," he said, admitting Google will not disclose specific details of how its been implemented with any partner.

Publishers have a split second to deliver the most relevant and highest-paying ads. Research from Soasta shows that if the ad takes an extra one second to load on mobile can result in a 58% higher bounce rates.

Google believes that real-time bidding and the efficiency of server-side connections can eliminate that one second to generate greater revenue for publishers without lessening the user experience, which makes it even more important to mobile advertising.

Johnathan Mendez, CEO at Yieldbot, said most publishers are not yet doing much in the way of header bidding in mobile, because the mobile Web cannot use cookies to match ads, which removes many of the demand sources.

While Google may see some advancements for brand sand agencies, Mendez said it's "too little too late for Google," because header bidding works.

Industry experts say the shift will not eliminate header bidding, an advanced programmatic technique where publishers offer inventory to multiple ad exchanges simultaneously before making calls to ad servers to serve the ad, but it will improve processes, especially for mobile ad serving.

"The issue around latency is a red herring," Mendez said. "With header bidding publishers can actually manage latency on their own and can test partners and technologies to figure out the best mix of page load time, revenue and user experience.

He said it was latency from ad exchanges using multiple passbacks for impressions that was one of the reasons header bidding gained popularity.

Google also globally released First Look, which it initially introduced to a limited number of publishers in December 2015. Publishers already using the platform such as like Gannett, Grupo Zeta, Gumtree, Sankei Digital, Scripps, Time, and Zoopla, which Google notes have seen their programmatic revenue increase by double-digit percentages.