We continue our list of 10 digital trends we see impacting our clients’ business during the coming year.
If you haven’t read the first post in the series we recommend you start here: Countdown 10 Digital Trends to Watch in 2017 – #10
6) What is Header Bidding?
Header Bidding is the latest frenzy to consume the media and advertising industry. Header bidding gives publishers an opportunity to get away from “waterfall bidding,” which is the current process of auctioning off inventory programmatically. With the current process, ad calls are made to one exchange at a time, moving “down the waterfall” if the impression is not sold through the previous exchange. Exchanges positioned lower in the waterfall could potentially lose an auction despite having an advertiser willing to pay more for an impression. In layman’s terms – imagine trying to sell your house and receiving three offers. The first offer is below list price, so you ignore it and move on to the second offer. The second offer is slightly above your asking price, so you go ahead and agree to terms with the second buyer, without even seeing what the third buyer had to offer. Who knows, it could’ve been more!
With Header Bidding, publishers add code into the header of the webpage (hence the name) which allows multiple exchanges to submit their bids at the same time, rather than sequentially, allowing the ad impression to be rewarded to the true highest bidder. The result is a more balanced playing field where a publisher can get highest market value for the ad space on their webpage. While the promise of header bidding is higher prices for publishers, it will also allow advertisers to gain access to high quality inventory that may not have been previously available.
Advertisers and agencies should continue to monitor header bidding developments and the impact this will have on premium inventory access. Right now, the impact on the day-to-day management of programmatic campaigns has been minimal. However, as the access to premium inventory expands, the true promise of programmatic buying may be fully realized. For the first time, programmatic media buyers will be able to access almost all available inventory, further enabling them to deliver the right impression for the right audience. Many more aspects (technological and otherwise) still need ironing out, but when all is said and done, header bidding should be a win for both publishers and advertisers moving forward.