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Revenue optimization for publishers in a post-header bidding world

Publishers are struggling to keep up with a rapidly changing programmatic landscape, says Andy Tu, managing director, APAC at OpenX. Every couple of months, it seems that new technology is popping up and changing the landscape yet again.

In recent years, the rise of header bidding in APAC has introduced a number of challenges and while it has slowly come of age, there are still publishers who are not quite sure what header bidding is and how it can work for them.

The Drum spoke to Tu on the challenges that publishers face with optimizing their programmatic revenue, the best approaches for them to stay ahead of rapidly changing developments, the future of programmatic technology and how it will evolve.

What are the top challenges for publishers now in terms of optimizing their programmatic revenue?

Right now, publishers are struggling to keep up with a rapidly changing programmatic landscape. New technology is seemingly emerging every couple of months and there has been little guidance on what exactly to implement, and how, to ensure the best results for publishers. Worse yet, with the growing number of indistinguishable players vying for publishers’ attention, publishers face an uphill battle in terms of who they can consider a trusted partner and advisor.

In particular, the rise of header bidding and containers in APAC has introduced a number of challenges. The simultaneous rise of these new, complex technologies has made it difficult for even the most seasoned programmatic professionals to be confident in their header bidding set up. For more mature programmatic marketers, header bidding came first, then container management, then solutions like Prebid. This timeline allowed for a smoother integration and optimization process. Publishers had time to get up to speed on the technology and its impact on revenue. They had more time and educational resources to make informed decisions.

Instead of that phased approach, APAC has seen a mad rush to implement both header bidders and a container management solution all at once. And, while that did help the market hurdle over a few of the initial challenges we saw with the technology in the U.S. (i.e. massive redundancy in demand and significant latency for some publishers), publishers looking to quickly implement and take advantage of the benefits of header bidding in APAC have been left with sub-optimal programmatic setups.

So, how can a publisher optimize their header bidding container (wrapper) set up?

As a pioneer of the header bidding in the U.S., deploying the first header bidding implementation to market several years ago and guiding hundreds of global publishers through the integration process since, we’ve picked up on a number of different optimization techniques to help publishers maximize revenue. 

Optimizing your header bidding and container setup, might sound like a daunting task for publishers, especially those who consider themselves less technical, but two of the techniques are fairly easy to implement on their own are: 

  1. limiting the number of technology partners and
  2. taking a proactive approach in deciding the order those partners are called.

When header bidding started gaining momentum in the U.S. a number of publishers rushed to add as many header bidders as possible to the page with the idea that introducing more competition would ultimately drive greater revenue. That worked to a degree, but eventually led to duplicative demand and latency. And, even as these partners were placed into a container management solution, it became clear there was very little incremental value, if any, in working with more than 4 or 5 header bidders. Limiting partners to a small group of header bidder providers that can deliver on performance will reduce unnecessary complexity and minimize potential latency issues.

Additionally, consider the order your heading bidding partners are called. In Prebid, for example, the order is randomized. While not necessarily detrimental to revenue, keeping this setting could mean that money is left on the table. Further, some container solutions order partners alphabetically by default, which could give some exchanges an unfair advantage. Instead of settling for default settings, we recommend publishers take a hands on approach. Publishers should set up a rotation for exchange partners, test each in the first position then adjust ranks based on response speed and performance.

What is the best approach for publishers who want to stay ahead of rapidly changing developments?

To stay ahead, we see three actions publishers can take. The first, as mentioned above, is to continuously optimize your header bidding set up. Optimization is the only way to ensure you’re maximizing revenue. The second and third: don’t cede control of your programmatic revenue to a third-party -- even though some managed service solutions seem like an easy way to get started, and build open and transparent partnerships with partners you can trust.

When it comes to header bidding and container management solutions, the technology is continuously being iterated and enhanced by companies looking to provide added value. Publishers should maintain an active role in their programmatic setup and avoid the “set it and forget it” approach if they want to stay ahead and ensure there are no surprises down the line.

Leveraging a container solution that provides a managed service may seem like an attractive option up front as it can free up time and resources for a publisher to focus on other areas of revenue, however, this means handing off valuable control to a third party. With programmatic now accounting for a significant portion of most publisher’s revenue, handing over the reins to someone that might not have your best interest in mind could be a recipe for disaster.

That said, regardless of whether a publisher employs a managed service container or an open-source solution, it’s critical to build strong relationships with the header bidding providers that have proven to operate as true partners. Beyond just providing technical solutions that deliver on performance, a great technology partner will foster an open and transparent relationship and consistently provide guidance and tips that allow a publisher to continuously improve and optimize their set up.

What is the future for programmatic technology, such as header bidding, how will it evolve?

For programmatic technology more generally, it’s not going to be optimization or product iterations that propel the industry forward. Looking back at how the industry has evolved over the last decade, the next phase of programmatic technology will stem from a substantial product or technical innovation. We already saw this with the explosive growth of real-time bidding (RTB), and then of course header bidding, both of which massively disrupted the way digital media is bought and sold. While this type of evolution only occurs every few years, we believe that the next big innovation is already on the horizon in programmatic with the rise of people-based marketing.

OpenX were partners of The Drum Digital Advertising Awards 2019. Register your interest for 2020 here

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