It increasingly looks like we’re reaching a watershed moment in online publishing. Programmatic technology has been rapidly adopted as publishers seek the fastest and most efficient way to offer their inventory to advertisers in order to maximise yield and get the best revenue return.
Header bidding has played a key role in that it has created an auction environment that allows advertisers to bid for the inventory they most want, allowing publishers the chance to sell to the highest bidder, driving up ad revenues. Publishers are adopting header bidders as a way to try to emulate a holistic auction.
However, as demand sources increase and diversify, the higher the number of partners with whom publishers have to integrate and so the greater the pressure on the browser. This reduces the efficiency of the bidding process, while also harming the user experience by introducing latency, which increases ad-loading times. The bidding process suffers because header bidding is not a ‘pure auction’ as such, but rather waterfall or series in nature, with bidders potentially queuing up to bid, rather than all demand sources being handled simultaneously.
The more complex the market gets, the less sustainable the current situation becomes, with publishers, advertisers and users all suffering. The only way out is switching to a technology that facilitates a horizontal auction. This would give advertisers equal opportunities to bid for the audiences they find relevant and pay a premium for them.
There is a growing need for a fair and transparent auction that knocks over the inefficient waterfall method and delivers one auction across the entire adserver. Conducting a single auction would reduce the inefficiencies that have become associated with header bidding, allowing all demand to participate at the same time and with equal priority, maximising competition, yield and revenue.
Holistic technology that creates a horizontal bidding process brings all demand – from all sources – into one seamless auction. It allows for easy management of demand partners and gives advertisers equal opportunities to bid for the inventory they need, when they need it. Delivered through a server-to server system, it also eliminates the latency problem, improving the user experience.
The good news is the technology to deliver fast, efficient horizontal ad trading is here. So which publisher is going to be the first to make the jump and force the horizontal trade of programmatic advertising for the benefit of the entire industry? When this does happen – and it surely will, sooner rather than later – the collective sigh will be deafening.
Andy Mitchell is CRO at Switch Concepts
Originally posted The Drum 7 July 2016