Julie Clark, vice president, programmatic sales & strategy for Hearst Core Audience, the unit at Hearst that handles programmatic ad sales, spoke recently with Real-Time Daily about the confusion in the market over header bidding.
Since we spoke, Amazon has thrown its hat into the ring with cloud-based header bidding, Index Exchange has launched a solution for header bidding for video header, and AppNexus launched header bidding containers that enables customers to manage multiple partners more easily.
As things heat up for heading bidding and server-to-server side integrations become more prevalent, Hearst maintains that despite its dominance as a tool in programmatic media, header bidding is a topic that remains shrouded in confusion.
Hearst’s programmatic offering is called Hearst Exchange and resides within its Core Audience suite of services, according to Clark.
Clark says Hearst was working with header bidding before it was called that. “Yield optimization has been talked about a lot,” Clark said.
Attempting to demystify header bidding, Clark explained the process allows for every impression to be valued vs. previously, when there were only estimates to go by. With header bidding, if one impression isn’t right for a Tier 1 auto marketer, for example, it might be the right one for a retailer, according to Clark. Header bidding has allowed for each of those impressions to be valued for marketers at the time they’re buying.
Clark said it's a disservice to publishers overall that, with 16 priority levels for publishers within DoubleClick for Publishers, a priority level might be very different from how the magazine division at Hearst uses it vs. the newspaper division. “It comes down to how each individual publisher sets up their ad stack,” Clark explained.
Within Hearst, for example, different divisions—U.S. magazines, international, etc.--may leverage priority levels in different ways. “We aim to leverage header bidding in a way that will give our divisions better access and insight into the inventory,” Clark said.
So what are the biggest misconception about header bidding?
“They still revolve around publishers that view it as just a yield optimization tool and that every header bidder is granted the same sort of access—a first look at the inventory before the content runs,” she said.
Another misconception: “People don’t know how publishers use the marketplaces. It’s very labor-intensive. Managing yield on a day-to-day basis, based on market fluctuations, seasonality, and new tech is about measuring the incrementality according to what each partner does. There’s a limited understanding of the environment,” Clark maintained.
For Hearst’s part, Clark finds that different business units find some header bidding partners to be more successful than others. There’s always a question of how many partners they should use. Should it be three or seven partners? Clark said Hearst uses three to four partners which she declined to name, and is evaluating at least two others.
Hearst business units are diverse and have varied needs and goals—there is the U.S. magazines unit, international magazines, Hearst Newspaper properties, Hearst TV, King Features, syndication, and entertainment properties, all of which makes for a complex media environment.
While the business rules around header bidding remain challenging for Hearst, the company hasn’t had technical challenges with technology integrations. How to use them with trading desks, agencies, marketers, preferred access to inventory, and how to move to a more guaranteed environment are questions Clark’s team is wrestling with.
“How do we best leverage this technology [header bidding] in a way that’s still very focused on Hearst? Guaranteeing audiences to a marketer is very important to us. How do we forecast those people and impressions across our entire portfolio and marketplace?” Clark asks.
As for private marketplace deals (PMPs), Clark said Hearst has seen a 200% increase in PMP spend year-over-year. “We’re seeing PMP and automated guaranteed as having some of the most significant growth. Programmatic used to be seen a direct response tool, but we’re expanding how programmatic is thought of in the branded world,” she said.
So what does the future hold?:
“We’ll see marketers start to use header bidding as another way to use inventory—a way to access inventory on a preferred basis. We’re going to see more discussion of this in 2017.”
Clark said she sees a lot of people are talking about server-to-server integrations as the next iteration for header bidding. “We’re starting to explore it, but I think 2017 will be a year of tactical evaluation on the publisher side. We need to do more heavy lifting on this. I don’t think 2017 will be a break-out year for sophisticated server-to-server integrations, but it’s a year to figure out the tactical stuff. We’re dabbling across the board,” Clark said.
So how can brands best take advantage of header bidding?
Programmatic needs to be integrated in the right way into a marketing plan, but programmatic isn’t the answer to everything. “We must continually ask: what is the publisher bringing to the table, and what is the best way to execute on the plan?” Clark said.
Clark said that Hearst Core Audience and Hearst Exchange programmatic sales saw a more than 200% increase year-over-year from 2015 to 2016 in programmatic direct—PMPs (which are non-guaranteed as a rule), Audience Guaranteed, and Programmatic Guaranteed. Hearst calls this “programmatic direct PMP/AG/PG,” Clark said.