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EMEA Managing Director Dave Reed Talks the Evolution of Header Bidding

December 21, 2016 — by Lauren Fritsky    

MediaMath partner OpenX recently hosted the eighth School of Programmatic event, which focused on the evolution of header bidding. Dave Reed, Managing Director of EMEA for MediaMath, participated in a panel on the impact of header bidding on the buy- and the sell-sides, moderated by ExchangeWire, with Tegdeep Kondal, product director for header bidding at OpenX, and Barbara Agus, director of programmatic EMEA and LATAM, Time Inc. Here is a recap of some of their commentary, which originally appeared on ExchangeWire.

Are buyers and sellers connecting through header bidding?

Barbara Agus from Time Inc., said header bidding is giving buyers the opportunity to access all the relevant users on a given property. This is a fantastic result; however, as a publisher, she is often asked whether she can see real changes in the way buyers are approaching inventory since starting to implement header bidding solutions. According to Agus, this is sometimes the case. At Time Inc., they are forecasting between a 10-20% revenue uplift. But publishers in the industry are often asking how buyers and sellers should be connected through header bidding, with concerns that a lack of understanding from the other side of the fence, for both buyers and sellers, could create confusion: HB might create a distorted and inflated vision of the volume of impressions available in any given auction. “We are sometimes accused of trying to make more money out of the same amount of inventory.”

Dave Reed from MediaMath responded to Agus’ concerns, saying header bidding is one of the most effective tools in bringing clients closer together. “It is often assumed that a higher price for the publisher means advertiser loss, and a lower price for the advertiser means publisher loss, but it doesn’t work that way. Advertisers will pay a lot for value, and that’s the world header bidding is starting to bring in.”

Is header bidding driving increased CPMs on the buy side and is that causing advertisers concern? According to Reed, no. He gave the example of a global client, where CPMs increased, but performance increased even more, which, as an advertiser, you might initially balk at. “It’s not a zero sum game”, said Reed, “as you can make the pie bigger for everyone, if you’re efficient.”

If header bidding is driving improved performance and yield for both advertisers and publishers, what’s the problem? Drawing from her previous experience using this tool, Agus points out that it’s the retargeters that seemed to be negatively affected. “We have seen buyer relationships improve significantly, but for retargeters looking for the cheapest impression to drive ROI, we have definitely seen a rapport decline. Before header bidding, those buyers had first access to inventory with no competition. With header bidding in the mix, they suddenly faced competition and, as a result, they wanted to stay out of the wrapper.” According to Agus, it is in dealing with premium advertisers that we can expect most improvements. However, this should not be regarded as a win/lose situation. According to Reed: “As marketers, we need to get beyond campaign-based buying. Consumers don’t live in a campaign world. Always-on marketing that allows programmatic tracking across devices and across platforms should increase CPMs, as buyers should be looking for quality.”

“Header bidding is bringing buyers closer to sellers”, said Reed, who feels it is helping promote a more transparent marketplace, with fewer walled gardens. Agus agreed, saying buyers have the opportunity to appreciate the value of their inventory, helping publishers understand how to price it better.

Are there concerns with header bidding?

Kondal said that, on the platform side, latency is the biggest topic: “I feel there’s a lot that can be done by publishers; but it’s really the job of the platform to optimise on behalf of the end user. At OpenX, we’re looking very seriously at how we can reduce the time it takes to return bids.”

Aside from latency, Kondal worried there isn’t much focus put on the DSP side; and explained how context should be provided to make them understand which bid requests are coming from header bidding and even ask them what type of auction they would like to participate in. “If you give them more context and control it would be a more balanced playing field on both sides.”

Speaking from the DSP side, Reed was, in general, very positive; but he did highlight that one downside is implementation: “If the publisher implements it, and the DSP doesn’t know the context, and is competing against an open auction, you haven’t achieved very much in grokking the waterfall and getting close to the first impression the user sees.” Reed admitted this isn’t a frequent occurrence, but it definitely happens.

HB is a fantastic piece of technology. When it fails, it is not because of the technology itself, but rather because it has not been fully understood.