Selling ad space on a website is a bit like the game where you have to guess which upturned cup, of three, the marble is hiding under after they’ve been moved around at speed.
Direct-sold ads are offered on a first-come-first-served basis to clients with whom the company’s ad team already has a relationship, but then things can start to get a little more complicated. The rest of the ad space is made available through a server, most likely to be Google’s DoubleClick for Publishers or DFP to its friends.
The space is offered to the biggest-volume buyer first and then moves down the line until someone offers to buy the space. The trouble is the biggest-volume buyers won’t necessarily pay the highest for the space – they could offer a low amount and the system dictates that the publisher has to accept the offer because it is first in line. As if that wasn’t bad enough, DFP has a sneaky setting (Ad Exchange) that allows it to outbid anyone else’s offer by a penny (per thousand impressions) meaning it always has first dibs.
So, not only are publishers not getting the maximum they could for the space, they also have no idea what it is even worth. And they shouldn’t have to guess which cup the marble is hiding under every time they want to sell ads.
In 2016, header bidding came to the rescue. Also known as advance bidding or pre-bidding, it offers the ad space simultaneously to advertisers regardless of their size and buying capacity. As multiple advertisers bid on the space at the same time, the publishers can see not only what it is worth, but also know they are getting the highest amount possible for it.
John Potter, CTO of Purch, noted that by adding just a single header bid source they increased their yield by 10%. And Facebook’s tests with publishers, such as the Washington Post and Forbes, showed a potential increase in revenue of 10-30%. In fact, according to eMarketer research in 2016, 48% of publishers reported higher CPMs (cost per impression) and 31% reported increased ad revenue yield from header bidding.
It is good news for the buyers too. They can identify the most strategic places to buy ad space based on their product or service and know that they have a fairer chance of bidding for the space rather than having to wait for the bigger buyers to pass.
So what are you waiting for?
Well, the system isn’t completely without fault. The header-bidding script can slow publishers’ page-load times (especially if the pages are heavy with third-party ad tags). It might even cause readers to employ ad blockers. The eMarketer research however, found that when publishers were careful, they saw 11% less latency and 23% fewer passbacks after using header bidding.
Should publishers take note?
Yes. Header bidding was big news last year and is expected to account for three-quarters of digital display ads in the UK alone by the end of 2017. Mobile and desktop publishers face the same issues of managing multiple ad partners, maximizing revenue while creating a good user experience, so a system that promises to do all three is not to be ignored.
As a testament to its usefulness, Facebook announced it’s making the Facebook Audience Network initially available to six ad-tech companies: AppNexus, Amazon Publisher Services, Index Exchange, Media.net, Sonobi and Sortable via header bidding. And that’s just the start; the next step is server-to-server header bidding that lets publishers cookie match with their header partners to maximize revenue still further. It’s a far cry from ‘guess which cup the marble is under’ ad selling.
If you want to find out more about maximizing your advertising, then get in touch with Amnet to plan your next online campaign.