Let’s Stop Talking About The Yield Benefits Of Header Bidding

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

Today's column is written by Rachel Parkin, senior vice president of strategy and sales at CafeMedia.

Header bidding is here to stay. So it’s time we stop talking about what the technology does for publishers and start talking about what it solves for in the marketplace.

Header bidding is not just a publisher conversation – it’s a programmatic conversation.

Much of the talk on header bidding has centered on the publisher benefits, namely increased yield and higher CPMs. Yet, buyers are focused on access, scale and audience buying. When agencies and advertisers question the benefits of header bidding, they deserve a clear answer: Header bidding makes the vision of programmatic as the conduit for all media buying a reality.

A More Efficient Market

Although we may have called it by the same name, we weren’t really doing programmatic advertising before the arrival of header bidding. In the old tag-based programmatic universe, there was a clear information asymmetry that prevented the growth of the channel and relegated programmatic to the bottom-of-the-barrel status in the ad-serving waterfall.

Without header bidding, publishers had no insight into which impressions an advertiser was interested in buying and which impressions they weren’t. This meant that programmatic inventory could only be offered up after all direct-sold, 100% fill deals were fulfilled. As a result, the size and quality of any programmatic inventory was capped.

The same lack of visibility applied to the buyer side, too. Buyers who wanted to push significant volume or specific audiences through programmatic channels were unable to see all of a publisher’s inventory because only a fraction filtered down to programmatic channels. This uncertainty created a vicious cycle, limiting buyers from allocating more budget toward programmatic and even holding back premium buyers from entering the market.

Header bidding solves for this information asymmetry and enables buyers and sellers alike to have 100% visibility into each other’s programmatic intent. Buyers now see all impressions available for sale from publishers and have the opportunity to bid on any impression. Publishers now know exactly when a buyer wants to buy an impression and can enable programmatic bidders to win a larger share of their inventory. Header bidding is not only fueling the growth of the programmatic marketplace as a whole, it’s enabling everything that advertisers sought to gain via programmatic buying in the first place.

Access

Header bidding gives programmatic buyers the same access to inventory as direct buyers. The certainty of 100% fill grants security to publishers that are increasingly comfortable letting programmatic compete with direct deals and even sometimes be prioritized above direct deals. Priority can be set individually for any deal ID, meaning buyers can get a true first look and making it possible to deliver on a programmatic guaranteed basis.

The use of header bidding doesn't imply that the highest bidder always has to win. Rather it gives publishers the flexibility to organize a programmatic waterfall in whatever way makes the most sense across all of their advertisers, which ultimately gives buyers the access they are looking for.

Scale

Header bidding opens up the programmatic flood gates for buyers. Without header bidding, buyers only had the opportunity to bid on remnant inventory. With header bidding, the inventory pool is unlimited, and now includes premium, highly viewable placements. Since publishers can now recognize, prioritize and decision on high-value bids when they come in, buyers get more unfettered access to premium inventory sources at scale.

By competing higher in the waterfall, buyers also get more consistent access to that scale, in return making it possible for them to shift a greater share of their budgets to programmatic channels. With a clear signal for which impressions an advertiser wants, a publisher can even prioritize programmatic buyers and commit to inventory guarantees.

Actionable Audience Data

Header bidding creates a place for any audience data to thrive, large or small. Buyers know exactly who they want to reach. The challenge has often been finding enough of them with the available programmatic inventory sources. Targeting based on an advertiser’s first-party or even third-party data is much more readily achievable with header bidding since it’s now possible to prioritize a deal such that an advertiser will win nearly 100% of the time they bid.

Regardless of whether there are 1,000 or 1 million people in an audience, a header deal with the right price and priority can ensure that an advertiser reaches its goal of delivering against that desired audience. The ability to set different priorities for high-value audiences gives buyers an assurance that they can scale on any audience, making programmatic data buying fully actionable.

Taking these benefits of header bidding together – access, scale and actionable audiences – allows buyers and sellers to take a large step toward a future where all media changes hands programmatically. Header bidding is so much more than a yield optimization tool.

It is what makes programmatic premium. It is what makes programmatic guaranteed possible. It is what makes programmatic programmatic.

Follow CafeMedia (@CafeMedia) and AdExchanger (@adexchanger) on Twitter.

 

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