Commentary

AppNexus Sees Hybrid Server-Side Header Bidding Approach Most Viable

Some ad-tech firms have offered up their server-to-server header bidding solutions in recent months. While server-side header bidding is one approach to current conditions in which publishers find their Web pages bloated with tags, bits of code, and widgets, it comes with its own challenges.

AppNexus recently published a report on the pros and cons of server-to-server vs. client-side header bidding, dubbed “Is Server-to-Server Header Bidding Right For You?” RTBlog asked Michael Richardson, Director, Product Line Management, at AppNexus, to offer some perspective.

RTBlog: Why did AppNexus decided to address this issue?

Michael Richardson: For all the buzz surrounding server-to-server header bidding, most publishers remain uncertain as to whether they should begin to experiment with it. Many of them are still working to understand how, exactly, it differs from client-side header bidding. We created a guide to clarify the differences,  analyze the pros and cons of each solution, and offer our recommendations for balancing and optimizing them.

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RTBlog: What are the pain points that publishers face when choosing a header-bidding set-up? 

Richardson: Every publisher has a unique set of circumstances, and there’s no one-size-fits-all approach for choosing a header bidding set-up. AppNexus believes that the server-to-server solution works best in a hybrid capacity with a traditional header bidding wrapper like prebid.js. The combination of the two capabilities offers publishers the flexibility to maximize cookie matching with their header partners and increase bid density through their server partners, while also managing latency and optimizing revenue.

Publishers need to keep up with the latest developments in header bidding technology and fully understand how a customized balance of server-to-server and client-side header bidding can support their KPIs [key performance indicators], so they are well- positioned to succeed in an evolving market.

RTBlog: So what are the key questions that people need to ask before considering server-to-server?

Richardson: First, publishers should ensure they have the level of transparency they were getting with a traditional header bidding solution. When the header bidding JavaScript is implemented on their Webpage, they have full insight and transparency into how an ad was selected and from which demand partner. When the decisioning moves to a partner’s server, they may lose this level of transparency and insight.

Second, a key factor for success in any header bidding solution is having access to a large pool of demand partners. As server-to-server header bidding is newer than traditional client-side header bidding, there may be fewer demand partners available at this time.

Third, when header bidding solutions were done on the publisher’s Web page, cookie matching was easier and more accurate. Publishers should consider that moving the solution from the Web page to a partner’s server makes cookie matching more difficult.

RTBlog: Where is the industry now with respect to use of server-to-server?

Richardson: We believe server-to-server solutions will become mainstream this year. Publishers are discovering that client-side scalability has limits and are learning about the trade-offs between server-to-server vs. client-side integrations, including latency and cookie matching.

They’re also rediscovering the value of working with an unbiased, low take-rate exchange instead of trying to manage dozens of partners themselves.

RTBlog: What is AppNexus' server-to-server product?

Richardson: AppNexus is developing its own server-to-server header bidding solution. it will be a hybrid model like I described, where publishers have complete flexibility and control to have demand partners either on the Web page in a traditional PreBid approach, or through a server-to-server integration. Index Exchange is also developing a server-to-server header bidding solution; we’ll be working with Index. Amazon has also announced a server-to-server header bidding solution in which AppNexus is an active demand partner.

RTBlog: AppNexus is one of the ad-tech firms working with Facebook on header bidding. What are your thoughts on Facebook's entry?

Richardson: Facebook’s entry into header bidding is a validation of AppNexus’ belief in an open and transparent advertising marketplace, and our investments in building an ecosystem based on meaningful connections between buyers and sellers, fair auction processes, and clear pricing. Facebook is opening up its Audience Network demand to mobile Web publishers using prebid.js and will participate in existing and upcoming server-to-server header bidding solutions.

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