In a previous blog post on Revenue Per Open (RPO), I wrote “There is a lot of discussion in our industry today around header tag bidding and the benefits of it for display web as a way to combat the traditional waterfall effect. The great thing about the way LiveIntent works with email inventory is that we have a true auction. Which means, there is no waterfall and if chosen, publishers can have their direct sold inventory compete on an even playing field with LiveIntent Exchange and Demand Side Platform. This ensures that the most appropriate ad and the right price will win bids, thus naturally driving up RPO.”
In this blog post, we’ll expand on the ideas around Header Bidding and how LiveIntent solves for this.
What is Header Bidding?
There are a number of resources out there that explain Header Bidding really well. Three of my favorites are here, here and here. In its simplest form, Header Bidding gives publishers the ability to set up a true auction and allows multiple demand sources to bid on valuable inventory at the same time, leveling the playing field and increasing competition. With the increase in competition, the goal is to drive better CPM’s and Yield Management.
What Does Header Bidding Solve For?
Traditionally, Publishers would set up a waterfall effect to monetize their inventory. The basic idea behind this is to set priorities within the ad server to deliver ad campaigns. The priority focused on the category of buyer rather than the delivery of the best ad. A typical set up would look like this: Direct Sold -> SSP1 -> SSP2 -> Marketing/House ads.
The problem with this setup is that the ad with the highest CPM or best for that particular user does not always win. Not to mention latency and passback tag issues that have the end result of leaving money on the table. The concept behind header bidding solves for the inefficiencies within the waterfall set up and allows for publisher to create an even playing field for buyers thus driving demand and yield.
From a Publisher perspective, Header Bidding addresses the following issues:
1. Passbacks, Waterfalls and Efficiencies: In order for the ad server prioritization model above to work, passbacks between the publisher, ad server, and SSP’s must be set up. These passbacks can cause slow load time and latency issues, further degrading a publisher’s CPM and Yield. Within the Header Bidding concept, passbacks are lessened because all demand sources compete equally to win the bid. Also, by creating a true auction for inventory, the waterfall that most publishers use will be lessened. Based on publishers’ business models some waterfalls should exist in smaller numbers.
The problem with this setup has always been that the publisher may not be delivering the most optimal ad (for the user and for revenue) because at any given time SSP2 may be the best ad with the highest CPM but since the Direct Sold campaigns and SSP1 are higher in the priority chain, SSP2 may not ever deliver – costing the publisher revenue. By setting up Header Bidding tags and making calls to multiple SSPs simultaneously, the ability to deliver the most optimal ad with the best CPM greatly increases. And there are some cases out there that show Header Bidding has increased some publisher CPM by as much as 50%.
2. How LiveIntent solves for Header Bidding: Simply put, LiveIntent runs a true auction environment. There are no passbacks, no waterfalls, no latency issues There is also no additional coding that needs to go in your email templates. LiveIntent’s platform was built on the idea of running a true auction on every single impression. What this means: regardless of the demand source, whether it’s publisher direct sold, LiveIntent Exchange or one of our growing list of DSP partners (MediaMath, DBM, Centro, etc..), calls are made out to each one on every impression so that we can serve the right ad at the right time. Simply put, we have proven technology that works and helps publishers increase revenue.
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