Do DMPs Make The Ideal Header Bidding Partner For Publishers?

jamescurran-updatedThe Sell-Sider” is a column written by the sell side of the digital media community.

Today's column is written by James Curran, CEO and co-founder at STAQ.

Many publishers work with a wide variety of RTB partners to get as many different demand sources to bid against their inventory as possible.

The “waterfall” that many have set up, however, relegates potentially high bids to the back of the line, and many publishers have been eager for opportunities to give RTB a shot at competing with direct sold advertising.

Juggling a myriad of separate tags for each RTB source is among the many challenges posed by header bidding. I believe that data management platforms (DMP) are perfectly suited to tackle some of these obstacles, yet I haven’t seen any hit the market with a header bidding tool.

To be sure, header bidding is a relatively new option for publishers, which want to optimize RTB and direct advertising channels together. Many are just starting to implement a few RTB tags in their header in hopes that the promise of higher CPMs is fulfilled.

From the relatively official AdX option that is baked into their ad server, however, to random hacks that may or may not be backed by larger companies, header bidding is a risky venture for publishers right now. Header bidding causes page latency, reverts to black-box ad optimization and requires quite a bit of manual setup and management.

In addition, the speed at which vendors are launching their solutions have left reporting by the wayside or neglected altogether. Header bidding is also new enough where fill rates and CPMs aren’t really justifying the extra risk and work in many cases, so the game is really just starting.

The biggest issue with header bidding has yet to be solved. Publishers need to put a separate tag in their header for every single exchange or RTB source. In theory, they could put up to 30 different tags in their header if they wanted to totally replace their waterfall. It’s simply not feasible for most publishers to manage this many tags on their own.

DMPs: Header Bidding Optimizers

I am surprised that DMPs have not come forward with a header bidding option of their own. DMPs could offer solutions to a lot of the problems with the current header bidding landscape.

Unlike with supply-side platforms, demand-side platforms (DSPs) and exchanges where a lot of publishers work with a wide range of partners, many publishers have selected a single DMP as their partner of choice. DMP tags are often already placed on the publisher’s site, and DMPs can handle latency issues and are set up to communicate in real time with the ad server.

Ideally, a DMP would serve as the optimization or at least the tag management layer for all RTB partners that would otherwise be in the header themselves. DMPs can handle massive data volume, which makes them ideal candidates to handle a variety of bids on behalf of the publisher. The major obstacle would be their optimization capabilities. But given the total rigidity of “highest bid wins” at play with header bidding today, they have time to figure that out.

Bringing Data To Header Bidding

DMPs don’t have to stop there. DMPs are built to protect audience data. The current header bidding solutions out there do just the opposite, potentially exposing publisher data to any other demand source. What publishers need is a partner that has a vested interest in ensuring that audience data remains secure.

The fact that DMPs are audience-oriented in their design and know the value of audiences across the landscape also means that they have an opportunity to actually observe the prices advertisers are paying for various audiences or even individuals across the web. With this information, the DMP could act as an audience pricing optimization engine for the publisher, or perhaps as a neutral marketplace for both advertisers and publishers in a way that DSPs have not done before.

Publishers On Par With Advertisers

Any publisher will tell you that programmatic is not exactly making their lives easier. RTB has a long way to go before publishers truly reap the same benefits that advertisers do and header bidding is only a baby step for publishers to correctly value inventory in the extremely liquid RTB marketplace. There is still plenty of manual labor and they are squeezed by new limitations from viewability standards and ad blocking. Yet, as RTB matures, the higher-quality content and engaged audiences will start commanding better prices than what they are getting now.

In order for this to happen in a way that is really favorable to publishers, publishers need to establish some sort of context that sets them apart from the bad stuff that advertisers are also getting through their DSPs.

The best way to do that is with technology that puts publishers on an equal footing to the buy side. I think DMPs that can act as a fair clearinghouse for desirable inventory. Good audiences could be the missing piece of the puzzle for publishers to regain their peer status with advertisers.

Follow James Curran (@james_curran), Staq (@STAQ) and AdExchanger (@adexchanger) on Twitter.

3 Comments

  1. Tony Casson

    Thoughtful piece, James, and I agree that DMPs and Exchanges who can function as DMPs have a larger role to play with publishers. Where DMPs and publishers can and should team up is to help eliminate the unnecessary overhead from too much cookie syncing and pixeling between the buy and sell side. A DMP might be the single source of truth used by the Publisher, the exchange and the Advertiser in this case. If we see more of the latter, a leaner more efficient advertising ecosystem will result.

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  2. I think the larger problem is that the demand-side is still shooting into the dark most of the time because publishers do not have a unified advertising standard to implement. The IAB needs to outline a placement standard with a data passback method for sites and developers, so we can all serve in stable and reliable inventory. DMPs can help normalize these imperfections between supply and demand, but not all companies are willing to be as transparent as they need to be to resolve things as important as discrepancies. It makes that user/brand connection that much more difficult, while the data most companies are collecting is not substantially different, it's really how they are analyzing and leveraging it. Advertisers could deliver a better experience if they had information like the exact positioning and placement of the ad slot in each inventory source, but there's no way to verify this once you send a creative into RTB-land. I think the fragmentation in the way ad tag code is 'supposed' to be implemented is still not as clearly defined as it needs to be on either end.

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