You may have heard of this being referred to as Stack Class. These white-board sessions originated in the early days of Real-Time Bidding (RTB), before the dark times… before The Empire, er.. Header Bidding. Before Header Bidding.
This video is a little dated, but it covers the technical basics of RTB. I’ve been toting it around for years privately. I figured it’s about time to set it free.
I called it Stack Class in the beginning because I was describing all the components of RTB, you know… the stack upon which everything is built. In this video you’ll find SSPs, DSPs, user synchronization (cookies?!%$#@!), bids, responses, PMPs, ad markup… you know, all the things.
A couple weeks ago I was looking over geographic location data to inform the return on investment of an advertising campaign. A significant portion of metropolitan data was showing a large percentage of the users sitting in the exact same location. It was as if they all checked-in on their apps while they were standing at the center of the city. That seemed unlikely. Was there something wrong with the data? Well, yes and no. More importantly: was it fraud?
I’ve was trying to figure out what to do with my Sunday. My options were: build a little header bidding ad server plugin for WordPress; run, sleep and eat; or write up some blog post on a pacing algorithm, because people still seem to be producing crappy ones. Since you’re reading this, you can probably guess which choice I made. I mean, it’s not the first post I’ve written on the subject.
It showed up again last week. I didn’t expect it, but I guess I never do. A saw-tooth pattern on a chart, indicative of a capping of sorts. A chart that says, “I want a thing to happen, but only so much.” In this case it was a traffic allocation. This was a surprise.
A little history
Most of the time when I run into a bad pacing algorithm it’s in the form of a campaign trying to limit itself. It only needs to acquire a few thousand impressions every five minutes, for example. So the hastily written algorithm might divvy up the impression allocation into five minutes buckets. Effectively that’s 12 buckets every hour. So it takes an hour’s worth of impression needs and divides it by twelve. One twelfth of the impressions are purchased every five minutes. Unfortunately at that point it switches to a simple counter that says, “for the next five minutes buy impressions until the number purchased reaches 1/12th of what I need in this hour.”
You end up with a purchase graph that looks like this.
Whether you think it’s a fad, a “hack,” the new standard, or the latest shiny object, header bidding has had a significant and disruptive impact on the advertising technology ecosystem. It may only be a matter of time before Luma Partners adds header bidding wrappers as a new box to their (in)famous landscapes.
The promise of header bidding with multiple exchanges has yielded positive results for advertisers and publishers but it has come with a cost that, over time, might be too much to bear. Whether it survives the fray, or evolves into something new, header bidding has changed the game forever.
Header Bidding: The Good
In the movie starring Clint Eastwood, The Good guy is not necessarily altruistic in nature, but he’s really good at capitalizing on opportunities.
Header Bidding brings those opportunities by providing premium inventory into the programmatic marketplace. No longer are the best impressions locked away in the tower of publisher ad servers. They are now accessible via the myriad of sophisticated Seller-Side Platform (SSP), Exchange and Demand-Side Platform (DSP) technologies. This gives sellers more articulate controls over the rules of engagement for every transaction.
Retargeting, made easier by RTB, can now be applied at all inventory priority levels, improving yield for commerce sites. Elusive audiences could be more readily captured by private marketplaces and the open auction, inviting new advertisers to test, refine, and commit to new deals with new partners.
Meanwhile, demand side systems are given the opportunity to bring more premium buying contracts to their platforms. This could be why some publishers started seeing higher revenue with header bidding in play. During Advertising Week in New York, one publisher cited header bidding as being responsible for 50% lift in CPMs. These types of statistics have been echoed by several others in the industry. While this might not be the panacea that saves the online newspaper, it certainly helps keep a few more lights on. Next: The Bad
Everyone is talking about the promise of header bidding, but what does it really mean to the future of publishing and mobile monetization? Header bidding is leveling the playing field by allowing sellers to make more intelligent inventory allocation decisions between traditional and programmatic demand. For advertisers, header bidding allows for better campaign delivery and optimization by providing more access to audiences at scale.
By implementing header bidding, publishers and app developers are able to expose every single impression to a programmatic marketplace. Many sellers are already reporting 40-50-percent increases in CPMs, and buyers have a new ability to bring their data to bear across multiple inventory sources. Next: The evolution, yield opportunities and scale
What a moment. Firing up the finance dept at @gogopixtv with the first AP cycle for our PRO partners. One of our main goals was to start sending licensing checks to music artists...and we made it happen.