MediaPost: Header Bidding Is Blind Bet Against Premium Video
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Header Bidding Is Blind Bet Against Premium Video
May 1, 2017, MediaPost
By Herve Brunet

View the original post by Herve Brunet here.

Despite its technical innovations, header bidding did not achieve its goal as a single solution
that centralizes demand and promotes buyer competition.
 If header bidding exists as a solution outside of an ad server, it creates and perpetuates the
same problem it was intended to resolve, creating siloes of supply and demand that limit
competition and ultimately prevent a predictable and sustainable strategy for monetizing
supply.

In a world of premium video and television that is supply constrained, header bidding is a blind bet that the best CPMs live outside of the ad server — and all of the technical risks and compromises are worth the price of a very risky blind bet.

What header bidding has achieved since 2015 is a forced evolution within sell-side ad decisioning, re-designing access and priority to the most desirable supply.  Instead of building custom and clunky integrations to support every bidding solution/vendor before the ad call, ad servers and supply-side platform (SSP) exchanges have consolidated, integrating the same header buyers (and vendor platforms) into a full stack  creates a central Unified Ad Decision, using  a combination of an ad server with an SSP,   with real-time bidders competing for supply alongside direct-sold campaigns.

The industry continues to see an aggressive push from new header-bidding vendors hoping to gain privileged first-look access to new supply—especially as video supply becomes available through programmatic channels.

Challenges are more pronounced for premium video content delivered through server-side architecture to environments that do not openly expose device and audience data required by header bidders.

While server-side header bidding attempts to address the technical challenges of latency and data leakage, it fails to address the central business problem:  removing siloes of demand and unfair first access to supply and data that could otherwise benefit from competition inside an ads server with Unified Ad  Decisioning.

So, what kind of bidding solution does the industry need?  What is the right way to think about requirements?

1.    How can I unify my video supply to monetize all content across all screens and environments (without putting header code on each and every page/in every player)?

2.    How can I use audience data to package my supply?  How can I use data to forecast and reserve user-targeted supply for buyer competition (instead of hoping that impression by impression audience matches will yield the best CPMs?)

3.    How can I centralize all of my demand—campaign-based direct sales, programmatic guaranteed sales, as well as RTB-based buyers—within a full-stack ad server, so I can optimize and execute across all channels and requirements?

4.    How can I ensure Unified Ad Decisioning that optimizes for CPM will also honor the business requirements I have for compliance and a premium user experience, regardless of the source of the demand?

An ideal solution is a unified full stack ad platform featuring an SSP that empowers the ad server to source demand and make optimal decisions that enforce compliance.  It is a solution that has all the merits, but none of the compromises, of header-bidding solutions that exist external to the ad server.

If programmatic has any real ambition to evolve from display to digital video to linear television, it will require business and technical models with the integrity and architecture of a Unified Ad Decision inside an ad server.  Anything less is a compromise that perpetuates siloes, creates sales channel conflict, and ultimately limits competition for the most premium supply.