“Need for Header bidding and the shift to relevancy over reach” By Dushyant Sapre , Criteo
Dushyant Sapre, Regional Director, Global Supply & Business Development, Criteo APAC , has expressed his thoughts in the Article. The article highlights how advertisers can ensure greater ROI on their investment on digital advertisers, since many times the ads don’t reach relevant audience. Further Dushyant also lists down the benefits of establishment of transparent ecosystem of header bidding and here it goes.
Need for Header bidding and the shift to relevancy over reach
Programmatic monetization technology has empowered digital publishers to monetize their audiences efficiently and with little reliance on an expensive direct salesforce. Traditional salespeople have now transformed into data-savvy programmatic teams with a laser focus on yield. Advertisers can buy billions of impressions at scale, layering in the relevant data and finding immediate results, which can be amended in real time.
Publishers are now increasingly divided into two camps: those who invest in building quality content, and build deep and engaged relationships with their audience; and those who build content around “click bait” model to acquire inventory, knowing that they are bringing a user in for a few seconds without engaging them in the long term. The former will drive long term audience loyalty while delivering measurable engagement for advertisers. However, an unfortunate reality is that in the programmatic world, the latter group is tasting the most relative success. That said, this “success” is, arguably, meaningless reach at the expense of relevance.
According to a study by IAMAI-IMRB, digital advertising market was projected to grow at a CAGR of 35 percent to reach $ 1.08 billion by the end of 2016. Moreover, online display ad spend in APAC is expected to reach$38.1 billion by 2021 as reported in the latest research by Forrester. Despite of all the potential industrial growth, publishers’ revenue growth does not match the industrial growth, highly due to lack of transparency in the bidding system. Header bidding can help address this imbalance.
Transparent ecosystem of header bidding, will remove the inefficiencies, clutter and noise that have developed within programmatic advertising, particularly RTB (Real Time Bidding). Here are five things publishers need to keep in mind:
- All buyers are different, understand them and treat them accordingly
Every ad buyer is different and should be treated accordingly. Some will have specific needs in terms of the type of inventory; some will be looking only for reach, and others will have user or time constraints. Understanding a buyer’s objectives means publishers can set up their ad stack to drive not only short-term revenues but also the long-term business with their customers. It’s critical to understand the buyer’s metrics, as well as their business model and measures of success. The space will evolve more, and this will be the only way to maintain success. For example, does a buyer need to be client side, or can they fit into a server-to server-solution? There isn’t a fixed answer for everyone.
- Make sure partners are adding value
Every third party that a publisher works with will be charging an ad tech ‘tax.’ Either directly or indirectly, all partners will be taking some value out of the dollar an advertiser spends. Therefore, publishers need to be clear on the value each header partner brings. For example, are they accessing unique demand? Do they have an incremental spend that can’t be accessed via another partner? Are they creating new formats (e.g. native)? If yes, publishers need to invest in the relationship and accept the margin made by the third party. Otherwise, it’s very likely the publisher may generate some short-term gains but will lose over time by not investing in partners that would add value.
- Yield optimisation is critical and cannot be outsourced
Having the correct approach is critical to growing a long-term and sustainable relationship between a buyer and seller. It is unlikely that a third party will be adding value if their business is simply ‘yield optimisation.’ Such an approach tends to drive the most value from each bid using soft floors or first-price techniques, leading to a vicious cycle resulting in long-term losses for the publisher. This may work for some buyers, but, for many others, this approach is the biggest factor hurting publisher margins, ultimately resulting in buyers bidding a fraction of what they’d be willing to pay for inventory. Employing this type of game theory between buyers and sellers creates a lose-lose result. The alternative is for publishers to encourage open dialogue with end buyers, enable tailored set ups along with layered audience data, and create strategies to meet common objectives. This deeper investment will result in long-term benefit and stop creating opportunities for simple arbitrageurs.
- Be transparent! Don’t obfuscate inventory
From a buyer’s perspective, there are two reasons that publishers obfuscate inventory: either a buyer wouldn’t want it because it is inappropriate, illegal, or fraudulent; or its premium inventory being treated as a clearing house, selling for below its actual value to achieve 100% fill.
While the latter approach often makes good business sense, the unfortunate side-effect is it allows the former to thrive. Once premium publishers stop obfuscating inventory, we as an industry will be able to make huge strides. There are other ways to clear remnant inventory, and we need to build trust between buyers and sellers.
- Think broader than standard display! The future is mobile, native and video
Header bidding is now the solution for standard display on the desktop. While header bidding is easiest in the standard display, publishers must ensure the most popular formats are at the centre of their strategies. In particular, mobile, native and video are formats that also must be incorporated into a holistic approach to header bidding.
So how do we reach the full potential of header bidding? Publishers need to combine the old and new. Header bidding is new technology that delivers a huge potential opportunity. The old values around understanding the customer’s needs, developing unique and tailored solutions, and ensuring your partners are driving true value across all your inventory are what will drive success. The rise of header bidding makes this all possible.