Why 2018 Was The Year Header Bidding Realized Its Potential

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This article is sponsored by Prebid.org.

2018 wasn’t the year header bidding first began disrupting how exchanges and publishers thought about monetizing their inventory, but it may be remembered as the year it reached an inflection point.

According to the ServerBid Header Bidding Industry Index, nearly 75% of the U.S.’s top 1,000 websites had adopted header bidding solutions to monetize their supply by May 2018 – the majority of them built on Prebid-based solutions. Even one year earlier, this outcome would have seemed unlikely. Proprietary wrapper solutions had already begun to saturate the market, creating integration headaches for publishers and exchanges alike.

Prebid.org’s commitment to cultivating an open source, transparent solution upended that trend midway through 2017.

“Up to that point [header bidding] was all very black boxy,” said Tom Kershaw, CTO, Rubicon Project. “We were literally on this precipice in 2016 where every exchange was providing their own proprietary header bidding software. We were looking at dozens and dozens of these different closed-code solutions emerging.

“At the same time, publishers were realizing that they were still beholden to one or two exchanges because they were locked into the proprietary technology of whatever wrapper they were using.”

The wide adoption of Prebid 1.0 throughout 2018 reaffirmed the importance of transparency and open access as the cornerstones of a successful header bidding marketplace. With that foundation in place, publishers gained the ability to move back and forth between exchanges with a high degree of fluidity and control, forming unified auction environments free of all the extra complications that came with proprietary wrappers.

Panelists Bram Woolcott, Mike Chowla, Rafael Guerrero and Alexandra Smith discuss header bidding at a Prebid.org conference in November 2018.

“The success and widespread adoption of Prebid release 1.0, I believe it really cemented the role of Prebid – not just as a programmatic demand script – but as the glue between what is going on on a publisher’s page and many of their programmatic features,” said Michael Richardson, VP, Publisher Products, AppNexus, a Xandr company.

Now more than a year after Prebid.org formed to encourage fair and open header bidding, the group’s membership has grown to include a consortium of industry participants, including founders AppNexus and Rubicon Project, as well as PubMatic, Marfeel, Ad Lightning, Sortable, OpenX Criteo, Oath and CafeMedia. Working collaboratively across project management committees, Prebid.org’s members believe sharing resources and standardizing the adoption of new header bidding solutions will generate mutually-beneficial outcomes that can help all members monetize future systems more efficiently.

Paving the way for header bidding’s next leap

If 2018 was the year header bidding standardized on Prebid solutions, 2019 promises to focus on header bidding optimization.

“From where we were in 2018, I expect this year we see more movement from partners and services into server-side header bidding and Prebid Server solutions,” said Lila Hunt, Head of Publisher Solutions, Sortable. “Solving server-side solutions is critical to being able to monetize future systems.”

Beyond the obvious benefits to publishers – reducing latency and improving page performance – Prebid Server also promises to help publishers more efficiently deploy unified auctions on emerging platforms.

For one, as mobile advertising continues to experience massive growth – anticipating ad spends totaling $141.36 billion by 2022 – Prebid Server will enable mobile publishers to move beyond the lingering in-app waterfall structures that have limited their revenue growth potential. Prebid Server will also continue to drive monetization of existing video, native and audio inventory.

“All of these things, they are going to come together and unify around multiformat Prebid Server,” Kershaw said. “Publishers have already cut their teeth with display and prebid.js and now they understand the benefits of having a unified option that they can extend across the ad stack.”

Added Mike Chowla, Senior Director of Product Management, PubMatic: “With video, for example, we saw that video header bidding went from something only the most tech-savvy publishers were doing in 2017, to something that is much more mainstream now. Prebid was a big driver of that. And I think mobile header bidding is poised to follow a similar trajectory.”

In order to more efficiently move the needle for header bidding adoption across each of these new frontiers, Prebid.org’s unique collaborative environment and a new Publisher membership tier allow it to collect and respond to feedback and insights from its partner publishers. In addition, Prebid.org hosted two leadership summits in London and New York in 2018, each drawing more than 100 attendees, to engage industry stakeholders – including publishers – in a two-way conversation about Prebid’s priorities moving forward.

“That was an oversight we originally missed. Publishers were looking for some control – a way to be heard – because ultimately they are the end consumers and they will drive the success of header bidding on these platforms,” Kershaw said.

“The idea behind Prebid.org has always been to get recommendations and contributions from as many entities as possible. That is how we ensure Prebid is truly a header bidding solution that continues to benefit everyone.”

Prebid’s first leadership summit of 2019 is scheduled for Barcelona, Feb. 25.

This post was syndicated from Ad Exchanger.