The Guardian US to test header bidding tech
The Guardian US confirmed this week that it is testing header bidding technology with ad tech vendors, thought to be AppNexus and Rubicon Project, to find new ways of allocating advertising inventory to improve ad yield. The challenge for the publisher will be to increase the number of bids on its advertising inventory without devaluing the real-time-bidding (RTB) user experience. Advocates of the technology, such as AppNexus, have welcomed the revenue gains that it can potentially bring, while critics such as Google claim that its propensity to impair page loading times detracts from the user experience. Experts expect that the ad tech industry debate over the strengths and weaknesses of the application of header bidding technology to monetise inventory as part of an auction process will continue throughout 2016.

The Guardian is the latest tier one title to experiment with the use of header bidding technology, as the publisher seeks to strike the right balance between increasing the number of bids on its advertising inventory without detracting from the user experience in a real-time bidding (RTB) context.

The Guardian has confirmed with The Drum that it is testing a number of ad tech options, and is working with a number of vendors, believed to be AppNexus and Rubicon Project, to trial header bidding technology.

Header bidding is a method of deciding how best to allocate advertising inventory, and causes much disagreement in the industry. While it has been available for years, the technology has received a massive push from several ad tech vendors over the past 12 months.

This technology works by letting a publisher offer an ad impression to several ad exchanges at once on an RTB basis, before issuing a call to its ad server (this is usually Google’s DoubleClick for Publishers). Alternatively said publisher can instead decide to allocate the ad impression to another method of monetization, such as a directly sold deal.

Balancing bid density and latency

Advocates of the technology claim this will improve yield for publishers by increasing the number of bids on a given impression, but as noted header bidding is not without its detractors (Google is a notable critic of the technology) with a key criticism being that it can impair page load times.

For its part, the Guardian is trialing header bidding to see how the technology can improve its advertising yield in the US, and key to this will be striking the right balance between working with the right number of partners without detracting from the audience experience.

One concern the Guardian (or indeed any publisher using header bidding technology) has to address is how the potentially longer page load times will affect ad viewability. Critics of the technology note that having to perform an ad auction before issuing an ad request to DFP could result in a user scrolling past any adverts before they have loaded properly.

Header bidding splits opinion

As mentioned above, debate over the application of header bidding has been one of the key issues of disagreement in the ad tech sector over the last 12 months, and is likely to remain so throughout 2016 as vendors such as AppNexus and Rubicon Project continue to extol its virtues now that the use of programmatic advertising has hit scale.

Speaking earlier with The Drum about the use of header bidding technology Tom Shields, AppNexus’ SVP publisher strategy, said the benefits of header bidding were that publishers have the ability to see what prices buyers are willing to pay for an impression, before having to accept a bid.

Discussing earlier header bidding trials AppNexus has conducted with publishers, Shields went on to state that the revenue gains were “huge”, and that concerns over bid latency leading to impaired page load times, etc., were overplayed.

To aid the rollout of header-bidding, AppNexus has contributed some open source code to the IAB US' Tech Lab, asking them to issue its seal of approval in a bid to promote header bidding. This includes submitting some guidelines, which are currently being reviewed by the trade body, according to Shields.

As noted above, Google is a vocal critic of header bidding technology, and is instead testing an alternative called ‘DFP First Look’, the revelation was first made in a heated debate on the use of the technology shown on the video above (courtesy of the IAB) where Shields (center stage) debates the technology with Jonathan Bellack, Google’s director of product management (seated right).

The alternative to 'the waterfall'?

Header bidding has been developed, and pushed to market with a view to addressing some of the issues involved with publishers monetizing inventory in an auction process – typically this is called ‘waterfalling’.

AppNexus’ Shields is quick to highlight that this method of monetization almost always favor Google’s DFP. He told The Drum: “The question you have to ask yourself is: who benefits from the waterfall?”

Similarly, in a recent opinion piece penned by Alex Reinhold, Sociomantic’s head of global supply, said: “To discuss header bidding without addressing Google is insane. Ultimately, both Google and ad exchanges are offering their attempts at horizontalisation—and our industry is lapping it up.”

Meanwhile, Martin Kelly, CEO and co-founder of Infectious Media, offered The Drum an opinion from the buy-side of the industry. He added: "Ad tech was supposed to be brought about to offer an open, liquid market place, and what some of this debate shows is that it's not."

He went on to sate that if 'waterfalling' is something that favors DFP then header bidding is a solution to be welcomed. "However, it can feel like it's a hack, and from the buy-side there are certainly questions to be asked of it," he added.

By Jessica Goodfellow, additional reporting by Ronan Shields