Header Bidding: Should Publishers Partner Up or Go Solo?

Header bidding is proof that, in the digital age, small code changes can make a big difference. By allowing multiple streams of demand to bid on the same inventory simultaneously, media buyers have increased access to inventory and publishers enjoy higher yields. With clear benefits for all, header bidding has made it to the mainstream. Writing exclusively for ExchangeWire, Ally Stuart (pictured below), regional director EMEA, Sharethrough, details what publishers must consider when opting to bring header bidding in-house versus partnering with specialists.

As adoption peaks – for example, 80% of Sharethrough’s publisher partners deploy some form of header bidder technology – we’ve reached a new stage in its evolution. Publishers are deciding whether to partner up with industry specialists, or go solo and take header bidding in-house, building on top of open source solutions like prebid.js.

But the question is – which path should they take?

The core considerations of header bidding

It’s not hard to see why publishers find it appealing to take header bidding in-house. With operations under one roof, there’s the prospect of greater control over the supply and demand process. By cutting out the intermediaries, publishers can greatly reduce their reliance on third-party programmatic partnerships and, in some cases, they may even achieve higher revenue as a result. In-house header bidding also means solutions can be precisely tailored to meet unique business needs, whether to boost profitability or work within an existing infrastructure.

Yet, taking the process in-house can come with challenges. The three key concerns – cost, speed, and expertise – must be addressed if publishers want to implement header bidding effectively under their own roof.

1. Gathering the resources for setup

The seeming simplicity of header bidding can be deceptive. The few lines of code that most people associate with header bidding are in fact only one part of a much larger infrastructure. Not only is it a complex ad server setup process, but the ongoing maintenance also requires considerable technical resources. This means that it often goes into development roadmaps competing with other initiatives, which can delay implementation. Some publishers report it taking them up three months to add in a new bidder, making it increasingly difficult to optimise for their highest performing demand sources.

Publishers should also bear in mind they’ll need systems for creating and optimising tags, analysis and reporting, setting prices, and adjusting bidding terms.

Implementing the required tech can be draining for budget and manpower and, for smaller-scale publishers, the financial outlay may simply be too great to prove beneficial. Indeed, in a climate where publishers such as The Guardian and The New York Times are making budget cuts, and are coming under increasing competition from Facebook and Google – which now net one-fifth of global ad spend – high capital expenditure could be hazardous for any publisher.

What’s more, in an increasingly competitive marketplace, the in-house approach can limit agility. For example, if publishers need to hire additional resources at peak times, scaling down in quiet periods can be difficult.

2. Convoluted processes can reduce speed

Ally Stuart, Regional Director EMEA, Sharethrough

Like any new tech, header bidding has had teething issues and latency is among them. Typically, latency is the result of publishers using too many header tags that slow page load times. This is a major issue for publishers, as long loading times can frustrate audiences and drive them to leave pages, taking ad revenue with them.

Yet latency can also be caused by systems that take too long to connect bids and ad delivery. A fragmented in-house engineering team or servers ill-equipped to manage the heavy lifting header bidding requires can impair connection times; so it is important publishers are prepared before they make the decision to take header bidding in-house.

3. The valuable knowledge of experience

Defining what works with programmatic is no mean feat – especially when errors can mean yield maximisation opportunities are missed. Header bidding specialists know inventory demand can vary depending on publisher traffic, so they can allow for this by adjusting bid-duration – such as longer bidding windows for low traffic and vice versa.

While this may seem counterintuitive, adjusting bid-duration can actually boost fill rates by providing more opportunities for media buyers to bid on impressions that are valuable to them.

Header bidding can have its pitfalls, but if publishers are prepared with the time, skills, and financial investment they’ll need, then an in-house offer is certainly viable and worth the commitment. However, not all publishers are equipped with the time or resources required to combat the unforeseen challenges that can arise – so working with a partner is seen as a much more reliable solution.

Could header bidding partnerships help publishers become more competitive?

Existing ad tech companies have many assets that publishers can harness. For instance, they offer a ready-made tech stack, the cost of which is significantly less than the outlay needed to construct internal ad serving systems. They also shoulder the risk of any further capital expenditure, such as expanding teams, therefore making economic sense for publishers to form partnerships.

It’s also worth considering the capabilities, expertise, and scale publishers can access through these partnerships. For example, if an industry leader like Facebook decides to launch virtual reality (VR) ads and achieves a positive audience response, large-scale ad tech partners will be able to quickly reconfigure their offering to help publishers adapt too. The streamlined systems of ad tech companies are also designed to bear the weight of tags, reducing the risk of latency.

Additionally, publishers can draw on the insights of their experienced ad tech partners.  Optimal formats, audience behaviour, bidding windows, and how the latest trends can be best applied for their specific vertical, are all fields of expertise that can be gained from partnering with a specialist. They have the knowledge of experience and have often already gone through the ‘test and learn’ process.

A fork in the road

To maximise header bidding’s potential, publishers must consider the pros and cons of taking the technology in-house versus partnering with a specialist. While the former provides more control, it also gives publishers greater responsibility. Partnering with an ad tech specialist offers increased agility and access to expertise, however publishers must be discerning in their choice. To ensure they take the right pathway for their business, publishers must take careful stock of their revenue, requirements, and resources before they make the decision to choose a partner or go it alone.