Why header bidding is one of the ad tech industry’s big challenges

Header bidding is one of the ad tech industry’s big challenges to Google DoubleClick’s monopoly. Facebook is making a big bid with header bidding as their latest attempt to challenge Google in the online display ad market. The technology was originally built to allow Google’s rivals to get over its monopoly by jumping in the front of the line in the contest for ad slots. Publishers can get the best price for their ad inventory as multiple exchanges can compete with each other, as well as with the publisher’s in-house sales time, thus driving up ad rates.

What is interesting is that before header bidding came along, publishers used a tool called “Dynamic Allocation” which allowed AdX to compete with in-house sales teams. This, however, meant that other ad-tech providers had to wait for AdX to finish filling up the inventory, before they got a look in, and this reduced their chances of winning, or even being able to participate in an auction, greatly.

Now, Facebook wants to enter the header bidding, by using it on its Audience Network, across mobile and video ads. It is expected that Facebook will launch header bidding in September or October this year. This follows Google’s major announcement in April – EBDA (Exchange Bidding in Dynamic Allocation), which was Google’s own attempt to compete with the header bidding. EBDA allows third-party ad exchanges to compete with AdX within the Dynamic Allocation product environment.

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