Commentary

Bye-Bye, Middlemen -- Header Bidding Is Here to Stay

When the same publishers that are being crushed by the current ad-tech ecosystem throw out link-baity headlines that Google is going to kill header bidding, it gets attention. It’s important, however, to read between the lines.

Google has validated header bidding with its recent announcement that in the next year it will offer its own version for publishers.

Google knows what every publisher that has moved to header bidding knows: Header bidding is here to stay, and is truly the transformative step for publishers to take ownership of their media for the first time. Header bidding is what is going to kill the middleman. Goodbye, LumaScape!

Header-bidding solutions are so transformative for a number of reasons.

Foremost may be that they enable publishers to have direct relationships with their largest demand partners. It’s no accident that demand partners with direct buyer relationships drove the rise of header bidding. These direct demand relationships, as most do, come with increased transparency. This is essential in the current market to building a media business and winning more budgets.  

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Header bidding cuts out the need of the middlemen. Why do I need a demand-side platform or a supply-side platform,  or anyone else taking margin out of the media in an exchange-based environment, when I can work directly with a header partner that has access to 100% of available impressions, understands the goals of my campaign, and knows what I’ll need to pay to achieve my performance objectives?

With header bidding, publishers also finally operate like all other commercial entities. A publisher is every bit a proprietor of inventory that a hardware store is.   Can you imagine any hardware store owner putting up with a system that didn’t allow them to know who their customers were, how much they were buying, and at what price?  Yet, that’s how digital media proprietors have been forced to transact.  The middlemen have had all the power, and the publishers never knew what their product—media—was truly worth in an open market, and to whom. Publishers also never knew maybe the most important signal for any business to succeed: why people who bought were not coming back to buy again.

Header bidding coaxes publishers into a territory that they have been avoiding, but is inevitable if they want to stem the tide of Google and Facebook: more investment in their code bases. Header bidding promotes the understanding of the causes of page-load timing and the impact of various tags and partners on their sites at a micro-level, where most publishers have not paid attention. Maybe most concerning is that middlemen have bloated pages with tags that harvest audience data, which is then used to buy cheaper inventory elsewhere on behalf of their other buyers.

Header bidding brings publishers control never before available. Publishers can adjust the ad-serving latency timeouts on a per-partner basis to maximize good user experience while optimizing yield on a data-driven basis. It can’t be overstated how important this is in giving publishers control of the balance of speed and revenue: a balance, by the way, that Google has understood for some time.

At the end of the day, no matter what Google rolls out into the marketplace, header bidding is giving publishers control, transparency and flexibility over the data and relationships they own.  That’s not technology, that’s just good business. The genie is out of the bottle and there’s no putting it back.

The wish many have asked the ad-tech genie for is being granted: “Make the middlemen disappear.”

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