Header Bidding Vs. Google’s First Look

Header bidding has proven to be one of the key areas of debate in the ad tech space this year, having been pushed heavily by prominent ad tech vendors, including AppNexus and Rubicon Project to name a few.

However, the momentum of the technology was disrupted earlier this year by arguably its biggest detractor Google, with its announcement of the full rollout of its answer to header bidding – DoubleClick First Look – a solution that is now available to publishers worldwide, as well as the trial of exchange based dynamic allocation (EBDA).

These solutions have caused much debate in the industry. The Drum probes opinion on the cases both for and against these rival approaches to publisher monetisation.

An alternative to ‘waterfalling’

Prior to the emergence of both technologies, many publishers looking to monetise their inventory using programmatic media buying technologies used a “waterfall” of ad tech. This meant that they could receive monetisation assistance from a number of ad tech partners, ie where bid requests where passed by multiple ecosystems, oftentimes providing diminishing returns and hindering an optimum user experience.

Such a strategy was also seen as a poor solution for publishers, with those in the ad tech sector particularly bemoaning the perceived bias such a method would have towards Google’s ecosystem given the dominance of its ad tech stack DoubleClick For Publishers (DFP).

Header bidding

Essentially, header bidding allows publishers to better decide how to monetise their inventory, by letting them view how much media buyers are will to pay for a given ad impression in real-time, according to advocates of the technology.

Using such technology, they can then decide whether to allocate an ad impression to a deal agreed upfront with an advertiser (often referred to as reserved inventory), issue a bid request to an ad server (Google’s DoubleClick for Publishers is by far the most dominant one the market), or monetise said impression via an auction on an open exchange, etc.

As mentioned, header bidding is backed by some of Google/DoubleClick’s most vocal detractors (namely AppNexus), and is said to have been developed to counter the widely held belief of the in-built bias within the Google ad tech stack (ie the alleged monopoly between Google’s ad server DFP and DoubleClick Ad Exchange, aka AdX).

This, claims AppNexus and friends, will lead to an improved yield for publishers (due to an increase in the number of bids made on an impression), with header bidding supporters professing multiple success stories of publishers using the tech to vastly improve yield in a short space of time.

Although, not all are impressed with this technology, with several sources approached in the research of this piece themselves calling header bidding a hack for more fundamental flaws in the ad tech ecosystem.

DFP’s First Look and Dynamic Allocation

As mentioned, Google has countered with the full rollout with its First Look solution, which offers publishers using DFP the option to monetise similarly by switching to its Dynamic Allocation tool (critics will point out this is closely tied to Google’s AdX).

This means publishers can better decide how to monetise their inventory by letting them view how much media buyers are willing to pay for a given ad impression – this time within the Google ecosystem – by inviting bids from multiple compatible supply sources. One of the benefits of this (compared to header bidding) is the ease of integration.

One of the main differences now is that in the past DFP had simply estimated what an outside supply source, such as ad exchange, could bring in, plus it did not let them submit bids for every impression (hence the allegations of bias). However, now they can see real offers in real time.

Advocates of Google’s solution claim this will help reduce the time it takes to load an ad, and thus enhance audiences’ experience, meaning audiences are then less likely to abandon a page.

“Before we scale exchange bidding to more partners, we will evaluate the results from our pilot testing and consult with participating buyers, sellers, and exchanges/SSPs to ensure that this solution helps the programmatic marketplace continue to grow and thrive,” read an announcement marking the rollout.

Similar to AppNexus and co., Google is trumpeting frequent success stories of publishers vastly improving ad yield using the technology. Publishers like Gannett, Grupo Zeta, Gumtree, Sankei Digital, Scripps, Time Inc., and Zoopla have seen their programmatic revenue increase by double-digit percentages, during beta trials of the technology, according to Google.

Given the relative ease of integration of Google’s latest update for those already using DFP, some have questioned whether or not Google’s latest move will kill off the development of the new ad technology which had promised a more open ecosystem.

So which one is winning out?

Notably inventory suppliers such as Index Exchange, OpenX and Rubicon Project (early header bidding supporters) participated in the early trials of the latest Google update. Although both Rubicon Project and OpenX claim that both header bidding and First Look can be used in conjunction with one another, the launch of the latter has fuelled speculation whether or not First Look will effectively kill off header bidding.

Countering Google’s argument is Brian O’Kelley, chief executive of AppNexus, who recently posted on Quora that Google’s latest move “is effectively a hack that enables publishers to decide how best to monetise their inventory”.

He goes on to raise specific concerns such as the potential negative impact on user experience if implemented poorly, plus it “requires significant manipulation inside DFP to make it work”.

He goes on to state: “It does not allow all demand to bid in (Google has rules about which buyers and even which campaigns can run). It imposes additional fees and forces buyers to route spend through AdX, another Google tax.”

Meanwhile, OpenX has also published figures suggesting that header bidding is far from dead in the water, publishing results which suggest that in the first three months of 2016, header bidding increased 300 per cent year-on-year, with the ad tech outfit also claiming its header bidder clients, on average, experience sustained revenue lifts of up to 50 per cent.

Some players are hedging their bets

Although Richard Reeves, managing director of publisher trade body AOP, is less committal when it comes to championing one technology over the other. He says the trade body’s members have all expressed an interest in both, exploring both header bidding solutions, as well as Google’s offering.

“With the multitude of tech providers supplying solutions along with the introduction of Google’s First Look, it remains to be seen how the two technologies can and will work together to further strengthen premium publishers’ ad models,” he adds.

Similarly, Neal Richter, Rubicon Project’s chief technology officer, says its header bidding solution Fastlane can also co-exist with its First Look offering. “We see our partnership with Google as being complementary to innovations in header bidding.”

He adds: “We will continue innovation in both directions, building an open and fair advertising marketplace that provides diverse opportunities for publishers to determine their own technology choices and platforms to maximise effectiveness of programmatic selling.”

Levelling the playing field

However, some sources approached for comment acknowledged that while Google’s latest offering is a powerful proposition for publishers, the wider ad tech/agency/publisher ecosystem is likely to welcome an alternative to Google’s DoubleClick, which many claimed was biased.

Bo Abildgren, Adform’s product director, maintains that Google’s latest move to effectively “open up” DoubleClick is a tacit admission of the need for a more level playing field in the ad tech sector.

He adds: “Ultimately, it depends on the individual publisher’s needs, the tools they use, and we’ll see price transparency and pricing considerations become increasingly important.

“Also, the issue of platform openness remains. At the end of the day publishers will continue to make their decisions, in part, based on how open and integrated their provider is.”

However, what remains to be seen is whether Google’s First Look will interface in a way that genuinely treats non-Google bids equally to those generated by its own, according to Abildgren.

Meanwhile, Jean-Baptiste Goux, head of business operations and tech advertising EMEA at eBay (which is effectively the publisher arm of the e-commerce giant’s business) describes header bidding solutions as simply “parallel bidding”, given the comparativeness openness of the monetisation process.

Goux describes Google’s First Look as simply a means to give buyers access to premium audiences that they want exclusively, without the standard waterfall environment. It’s only a quick fix to an inefficient way of operating.

“However, we believe parallel bidding will give every ad buyer access to the audience they want and mean that the best price will win. eBay has been relying on this concept for the last 20 years – fair and equal auctions for all shoppers, whether you’re buying advertising space or products on the site,” he adds.

So despite the launch of First Look by Google posing a serious setback for those espousing header bidding, the latent demand for a more open ad tech ecosystem appears still strong enough to ensure the coexistence of both technology solutions.

The likelihood of both co-existing (even if in fierce competition with one another) remains to be seen, but the battle of the respective ‘hacks’ is likely to be one of the dominant debates in the online media trading sector in 2016.