• by Jessica Burget , Op-Ed Contributor, March 8, 2017

Ad tech has latched on to its latest shiny object -- and almost everybody is addicted, according to a report from BI Intelligence. The benefits of header bidding are clear -- transparency of all inventory should help garner fair value in buying and selling digital media.

Header bidding (HB) -- and with it, server-to-server (S2S) bidding -- showed much promise for advertisers, with access to a publisher’s higher-quality inventory. As a page loads, advertisers can submit their best bid, which would be weighed equally with the best price of direct-sold ads. S2S methods offered a complement by directing the best bids to a server first so that a publisher’s bid evaluation does not affect Web page load times.

So how should a company select partners for this endeavor and prioritize new tech and vendors that pop up regularly?

To explore this further, over the span of three months last year I met with 20 vendors offering a solution, from HB to wrappers to S2S tech. Sometimes all of the above came from a single vendor. For simplicity’s sake, I’ll explain the perspective of an ad exchange looking to access publisher inventory using this method.

Partners

Traditional sell-side platforms and ad exchanges have been developing for this evolution for a while. They are hyper-competitive and have a hard time differentiating from each other, so they typically won’t allow demand from other exchanges.

Tech enablers using PreBid.js develop software that is neutral to both the buy and sell side. They offer open-sourced wrappers, which can be a turnkey solution that makes it easier for demand and supply partners to adopt HB. Some wrappers can take months of development, and many companies may be ahead of you in the vendor’s integration calendar. A publisher using a wrapper could pool five to eight demand sources simultaneously, but it is fluid. Partners need to constantly show their value, or they get cut.

With S2S, who knew that Amazon would emerge as an option? The largest companies that offer S2S can generate their own demand, so an exchange or demand-side platform (DSP) would need to prove why its demand is unique and deserves priority in integration. Other S2S vendors (e.g. Media.net, Sonobi) don’t have their own demand and could be considered agnostic.

Regarding wrappers versus S2S, previously, with header bidding, a publisher needed to be selective with demand partners. But with S2S, publishers could potentially onboard many more partners. Still, the tradeoff is that the data is not always transparent for either the demand or supply sides, so a demand partner may not know how it compares to competitors.

Takeaways:

To narrow down the HB vendor short list, here’s my advice.

--      Be cognizant about maintaining the relationship with publisher partners, not just the HB technology partner.

--      Leverage the HB solution to secure partners that were inaccessible before, and maintain unique demand to bring to the table.

--       Match the level of integration required to what an internal staff can handle. Tot every company can tackle heavy development work for HB (and not every vendor can manage the development you want).

--      Push for transparency in reporting insights, to learn how to be a better partner. In S2S, if either side doesn’t push for this is, vendors will continue to be black boxes.

--      A company needs its business to be aligned with HB adoption. Media operations teams need to understand how ad buys can change with this capability. And whose job is it to keep the organization informed on what you can do with header bidding?

If more suppliers ask advertisers to access their inventory via the header, it could mean that buying networks or buying down the waterfall become less valuable. This will be exacerbated if publishers take a multi-pronged approach to this model, with select partners in the wrapper and additional S2S partners coming after that, before the waterfall starts. Suppliers will have more access to brands willing to drive up the price of inventory.

But with publishers scrutinizing who gets into its header bidding pipes, demand sources who can’t illustrate their value will be relegated to the lower levels of the waterfall, fighting for scraps. Good luck out there.