The winners and losers of Facebook’s dive into header bidding
Facebook finally started rolling up header bidding last week, a sell-side solution that the company had been testing since last August. In conversations with Digiday, almost everyone in the ad tech community welcomed the move: Facebook now brings mobile web demand (and some video demand on desktop) to publishers that are working with Amazon, AppNexus, Index Exchange, Media.net, Sonobi and Sortable, outside of the Facebook Audience Network.
Facebook’s header bidding integration can either take place on page or on a publisher’s ad server, depending on the approved partners. It looks like a win-win situation for everyone — except for traditional supply-side platforms and Google DoubleClick ad exchange.
Below are the winners and losers of Facebook’s header bidding expansion.
Facebook bringing their demand to header bidding vendors matters to publishers because having more demand sources compete in an auction can lead to higher bids and more revenue. Many publishers need new revenue streams when it comes to mobile web, as their existing desktop stacks and partners are unable to recreate the yield in mobile. This is especially challenging when a publisher has more mobile inventory than desktop, according to Dan Meehan, CEO and founder of mobile software PadSquad.
“FAN lets its advertisers find targeted consumers who are matched with Facebook data on the mobile web,” said Meehan. “This drives quality CPM demand at scale for publishers and the header bidding partners who provide the connections.”
Among the six initial partners working with FAN on header bidding, Amazon is perhaps the most interesting one. As it is becoming a bigger player in ad tech in its own right, it needs Facebook’s demand to feed all of its existing publishers and attract new publishers.
Ad tech firm GetIntent’s March survey of Alexa’s top 1,000 websites shows that only 121 of them have adopted header bidding. Among those 121 publishers, around 42 percent are using header bidding solutions provided by Criteo, nearly 24 percent by Amazon. So there is much untapped market for Amazon. The e-commerce company reportedly developed a cloud-based header bidding solution last December to compete with Google.
The partnership with Facebook also fits into Amazon’s strategy to move publishers to server-side bidding, according to PadSquad’s Meehan.
“Header bidding is known to have a latency issue. Given mobile speed and mobile yield, Amazon has made big investments in the server-side business,” he said. “It will be interesting to see how FAN reacts to the pending move to server-to-server auctions.”
The value of the inventory found in SSPs declines when there are other sources bringing that inventory to the auction. FAN bringing its inventory to header bidding will increase the supply in the auction, which could reduce publishers’ demand for SSPs.
“SSPs may become a channel only for remnant inventory,” said George Levin, CEO and co-founder for GetIntent.
Facebook and Google are, together, eating up 99 percent of every new digital ad dollar. So Facebook’s header bidding integration is a direct swipe at Google, which created the waterfall.
In response, Google is ramping up its header bidding alternative. It reportedly plans to add more tech vendors and publishers this summer to the open beta of a program that lets outside bidders to compete with Google’s own network of buyers for an inventory.
“Google is trying to fight back. At the end of the day, I’d hope that it can help publishers.” said PadSquad’s Meehan. “Lots of ad tech is focused on the demand side. It has been a tough run for publishers and they do need some help.”
‘We’re netting out with higher revenue’: Publishers reaping the benefits of Snapchat’s strong second half
With CPMs up as much as 20% year over year in the fourth quarter, many Discover publishers are bullish on the upstart platform for next year.
How Cosmo is building brand affinity with younger audiences through its focus on commerce
Cosmopolitan's focus on e-commerce through a line of branded wines and its own shopping holiday has led to a 254% increase in product sales.
‘Go to market faster’: The Washington Post’s Arc goes outside the tent for payment and data integrations
Subscriber revenue has become more of a priority to the Washington Post's Arc clients since it launched its subscription tools last year.
SponsoredPublishers will lead the charge as cookie-less advertising becomes the norm
Steve Wing, managing director, EMEA, Magnite As the advertising industry moves closer to a cookieless world — one in which browserless environments including connected TV (CTV) and mobile in-app are an increasingly large part of ad budgets — publishers will have an increasingly important role in developing the future of identity. Segment creation and identity […]
‘Profitability in the back half of next year’: BuzzFeed CEO Jonah Peretti (and Verizon Media CEO Guru Gowrappan) on their big merger
A special Digiday podcast episode features Interviews with BuzzFeed CEO Jonah Peretti and Verizon Media CEO Guru Gowrappan.
‘People have had permission to experiment’: Pandemic expedites rethink on 9-to-5 work structures
Starting out as a short-term fix to weather the coronavirus storm, employers are seeing work hours outside the traditional 9-to-5 week as a new normal.