Ad-Tech Execs Weigh In On Facebook's Entry Into Header Bidding

Facebook’s announcement last week that it will enter header bidding provoked diverse reactions from ad-tech executives. RTBlog asked a few for their take on the move and what it means for the ad-tech ecosystem. Here’s what they had to say:

Mike Caprio, GM of programmatic at Sizmek, put Facebook's actions into context: “The bigger picture is surely around Facebook’s continued push to align itself closer with publishers. First, its Instant Articles both speeds up  content delivery and protects against ad blocking with the Facebook App. Then there's its public push against ad blocking on desktop, and now its entrance into header bidding to gain ‘first-look’ advantage over inventory across the Web.”

Caprio sounded a warning for publishers: “For the publishing industry, this means that Facebook will be driving demand at a higher CPM than in the open market, but it comes at a cost.  Continued reliance on Facebook as a platform puts publishers between a rock and a hard place.  Today it means keeping the wolves in the ecosystem at bay, but looking toward the future, this friend-enemy relationship may leave some [publishers] extinct."

Jon Schulz, CMO of Viant, isn’t surprised by Facebook’s move: "Header bidding has become hugely popular with 70% of publishers now adopting the technology. It’s become one of the industry's biggest challenges to Google DoubleClick's monopoly, so it comes as no surprise that Facebook has joined the party.” 

Facebook’s entry into header bidding marks another sign of its laser-like focus on its publisher/partner strategy now that LiveRail has been phased out, according to Craig Berlingo, VP product, Seller Platform at Tremor Video. “Historically, because Facebook has been so protective of its user data, this has precluded it from participating in the larger ad ecosystem to get scale. Instead, it had to work with publishers on an individual basis, through agreements and integrations that would allow it to expand the inventory in Facebook’s walled gardens. With Facebook clearly on a path to reach beyond its own four walls, it may  may pose enough of a threat to Google, so that it may have to finally open itself up in a material way,” Berlingo said.

Facebook’s move into header bidding also signals an expansion for its Facebook Audience Network (FAN), which is a good thing, according to Hector Pantazopoulos, CRO, SourceKnowledge. “Facebook is expanding its audience network and leveraging its position with advertisers to gain a piece of the header bidding ecosystem. This is good for publishers and good for advertisers, as it offers control over ad placements back to the publishers,” he said. “Facebook adopting this approach also legitimizes header bidding as the next step in the evolution of ad delivery. Facebook is also taking a piece of the open web and in effect breaking down its walled-garden approach. It’s giving in to the demand that is looking for more opportunities to target users. This is a positive, as we believe the Web should be open and available for all marketers to be able to leverage,” Pantazopoulos added.  

“The market continues to see the benefits that publishers can achieve with header bidding tools. The challenge, however, is how much transparency will they actually receive, or [how much] flexibility they have in using network tools that appear open, but sit behind walled gardens,” said Tim Mahlman, president of AOL Platforms. “Our focus is to operate on open, non-biased principles that truly put the publisher first.”

Victor Wong, CEO of Thunder, believes the move will facilitate more ad formats: “Facebook is further encouraging publishers and advertisers to adopt new ad formats beyond the standard banner ad for the open Web. Native display formats like Facebook's will become increasingly prevalent, which means publishers and advertisers will need to start thinking about how they will build for it,” Wong said. “Facebook Audience Network is mounting a serious challenge to Google DoubleClick's stranglehold on ad tech. Google will have to further invest in its programmatic native exchange capabilities to stay ahead of Facebook in the marketing trends of multichannel and programmatic,” Wong said.

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