Amazon’s Header Tag Goes Server-Side And Brings In Outside Demand

Amazon’s four-year-old header tag is going server-side, making it among the first header tag solutions to move to the faster, more sustainable setup.

Sources briefed on the change described the details of this change to AdExchanger, which Ad Age first reported Thursday.

As header bidding has taken off with publishers and more ad tech companies advance their own solutions, the industry is seeking ways to reduce the latency that has become a necessary byproduct of the practice. By moving all the ad decisioning from a user’s browser to Amazon’s server, publishers should see faster load times.

Amazon won’t just offer its own demand. Publishers can now use the tool to move all their header partners server-side, housed inside Amazon’s solution. Call it a server-side wrapper – or a meta ad server.

Ad tech partners can get touchy about being in someone else’s header-bidding solution. And ironically, considering the new product, no one has been more resistant than Amazon. The company refuses to be in any ad tech partner’s header-bidding wrapper, which industry sources usually attribute to concerns that being wrapped could leak its audience and bidding data.

To entice ad tech partners to play nice with its server-side wrapper, and to get publishers to sign on, Amazon is offering data and fee transparency.

The data transparency would mean that a publisher’s header-demand partners (a group that might include AppNexus, Criteo, Index Exchange, OpenX, Rubicon Project or Sonobi) would be able to see all bid details, and so would the publisher. Additionally, those partners will be allowed to pay the publisher directly rather than process payments through Amazon.

In comparison, publishers and ad tech companies testing Google’s server-side exchange bidding solution won’t be able to work with each other directly. They also have unanswered questions about exchange bidding’s fee structure and how it decisions, sources noted.

“Philosophically and from a business perspective, we are aligned with what Amazon wants to do,” said an ad tech executive briefed this week on Amazon’s offering. “They are offering data and marketplace transparency. We pay the publisher directly. Those things are critical.”

But, the executive added, “Our concern is if they will be able to support our technical requirements within the server-to-server environment to fully support our customers.”

For publishers, data and fee transparency is a notable enticement. Header bidding improved their visibility beyond what they could see with a typical Google DFP ad server, and they’d like that visibility to stay.

Publishers also don’t want to get bogged down with fees. One source who viewed the contract said the server-side tool will charge about a penny or half-penny CPM, less than many publishers’ ad-serving fees.

That said, some publishers were skeptical of Amazon’s offering or said it wasn’t right for them.

“This is smart for Amazon, not so much for publishers,” said Purch CTO John Potter. “Amazon gets to make the last call on whether they want the inventory at the bidded price, and they get all the bidding info, so they can adjust their bids everywhere else.”

Will Amazon succeed? The company brings with it a huge amount of demand – both its own and that of its advertisers – to entice publishers. Sonobi President Anthony Katsur compared the initiative to Procter & Gamble’s Hawkeye project from a few years ago, in which P&G pursued header integrations with publishers to gain visibility into online audiences and to inform its bids.

Amazon’s server-side solution will put it in competition with players like Google, but also Criteo, another longstanding header-bidding player.

“[Amazon’s solution] is competitive to what Criteo just announced, and publishers will have to choose,” Potter said. “It offers a lot more than Criteo. The question is, how nervous will publishers be about giving Amazon that data and control?”

While many ad tech partners view Google as a competitive threat, Amazon’s ecommerce focus and outsider status in the ad tech world may speed adoption of its tool.

“Amazon not being part of the oft-spoken-about duopoly is good for the industry. Distributed power is typically better,” noted Jay Friedman, COO of the Goodway Group.

That said, Amazon’s newbie status as an ad tech player will test its ability to service the publishers who onboard its tech. It will have to invest in account management, publisher tech support and client services to support those publisher relationships.

After all, if a header is down, publishers don’t make money.

This post was syndicated from Ad Exchanger.