Google’s exchange bidding product entered open beta on Thursday. Publishers will be able to test how Google’s solution fares against their header bidding setups.
But here’s a tip from publishers already using exchange bidding: Use both. Each connection has its own pros and cons, they told AdExchanger. For the time being, it’s better to test the solutions side by side to fully capture the benefits of each setup.
“It’s really still early in the header bidding game,” said Jeremy Hlavacek, VP of global automated monetization at The Weather Co. “We don’t want to be picking winners. We want to continue to test all the opportunities and use data and measurement to see what works best for us.”
Faster than header bidding
Publishers agreed with Google’s claim that exchange bidding is a faster and easier alternative to header bidding. Google said the product takes less than a day to set up. In contrast, header bidding requires complex management from publishers, who must tap into their development teams.
“Exchange bidding is pushing the industry forward as it relates to speed and ease of setup,” said Ryan Pauley, VP of revenue operations at Vox Media. To him, fast setup and quick bid responses are the biggest benefits of the product.
Header bidding often adds latency because code must run on the browser in order to field bids. Google said it’s been able to get exchange bidding to returns bids within 60 milliseconds, though not all publishers consistently experience such quick returns.
Google claims better yield, but results vary
Results around yield varied. Google said closed beta participants saw yield rise in the double digits on the low end, with a maximum lift of 40%. How much of a boost publishers got could depend on the initial optimization of their setup.
One reason exchange bidding might give publishers more modest revenue gains? Lower match rates in server-to-server connections may impact demand and overall yield. Without a tag on the page, it’s more difficult for exchanges to find the cookie of the user they’re looking for.
“Exchange bidding is not necessarily a yield play for us, it’s a better user experience play,” said Chip Schenck, VP of programmatic sales and strategy at Meredith. “At the end of the day if our user wins, our advertiser wins and the yield will technically follow.”
But exchange bidding can also save publishers money in less obvious ways. Because it plugs in perfectly with DFP, discrepancies are lower, Schenck said. Theoretically, the speedy server-to-server connection should improve viewability and yield, he added.
Product maturation
While speed and ease of use will encourage many publishers to test out the beta, exchange bidding still has gaps.
Vox does many private programmatic deals, which exchange bidding doesn’t support yet. And overall demand is still sparse, Pauley said.
“There is still not enough demand running through those pipes as it stands today. It’s not going to overtake header bidding,” Pauley said. “They will still have to continue to make inroads there with the rest of the demand sources and the supply sources to get where it needs to go.”
But because exchange bidding is easier to use, publishers may place more partners there, especially if they don’t have a strong in-house product team, Pauley predicted. “Rerouting existing demand sources through exchange bidding becomes quite interesting for those folks,” he said.
Fees, fees, fees
Google faces a market where exchanges are undercutting each other to get closer to publishers through their wrappers or server-to-server solutions. While many header bidding solutions are free or charge a small ad-serving fee, Google charges a percentage of media.
But even a higher fee isn’t necessarily a deal-breaker, especially if lower discrepancies, higher viewability and greater speed add some of that revenue back.
Publishers weighing header bidding solutions versus Google exchange bidding should read contracts closely in order to determine if the ad tech taxes are worth it, Hlavacek advised.
“We have a relentless legal team,” he said. “We read the contracts. We do the math, and figure out if the fee and percentage works for our business, or if there’s an alternative.”
As publishers take a closer look at speed, yield and fees – and push for transparency – some players may fall off, Hlavacek predicted.
“I don’t know who is going to ‘win,’ but I do think that the field will be narrowed a bit,” he said.
