Krux Data Matters 2016: Why The Buy Side Is Embracing Header

Now that header bidding has proved itself a central theme in the current ad tech zeit geist, the marketers are getting involved.

Header tag buzz began in the ad ops community and took root until digital ad sales caught on. Nearly a year later, the buy side is talking. And it’s my personal opinion that when media buying innovations travel to the brand marketers, things are about to get really exciting.

I can’t tell you how many times we’ve fielded the question, “Should marketers care about header bidding?” in the last few months. It’s countless. Luckily, we have strong opinions on the matter.

This same question came up during a conversation between Krux COO, Michael Moreau, and Index Exchange’s CEO, Andrew Casale, a few weeks ago on stage at the Krux Data Matters annual conference in Las Vegas. Andrew’s response was simple and hinged on the following programmatic virtues: vision and access.

The answer to the question is yes. Here’s where the virtues come in:

  • Vision. If a buyer buys in a tag-based, waterfall environment, they are only seeing a super small slice of a publisher’s inventory. With such a limited view, it’s impossible for a buyer to understand exactly how a specific audience is represented – they only see the impressions that bounce to them via the waterfall. In turn, they may fail to reach the audiences sufficiently, either because of scale or less valuable, impactful placements. Alternatively, if a buyer purchases ad space through header pubs, they can get a better picture of the full audience representation. The buyer can ensure that all instances of the audience are capitalized on and the ads that are placed are high-impact. This significantly improves the buyer’s ability to forecast available audiences and adds less guesswork to the media plan.
  • Access. If you’re buying from publishers whose ad stack focuses on direct sales and a waterfall of exchange partners, chances are you’ll never get the most valuable, premium inventory from them programmatically. The direct buyers gobble it up first and if you’re lucky, something good will come your way down the waterfall. Header tag completely eliminates that sequence and can give programmatic buyers equal access to high value spots. This reality becomes really compelling when you think about header tag and video. Premium, pre-roll video inventory is scarce and perpetually sold out – with header tag a programmatic buyer can access a video impression and compete against direct-sold buyers to win it.

Don’t Be Afraid of Higher CPMS – The Economics Are Changing

A big reason this question is everywhere stems from the fact that header tag CPMs are higher, on average, than CPMs of impressions sold in the waterfall. It’s critical for buyers to understand that this isn’t because header tag is some hack to inflate publisher yield, it’s because header inventory is more valuable and the transaction is simpler.

Because of the vision and access header tag provides buyers, CPMs are higher. Buyers are finally able to cherry-pick the impressions they want and name their price, instead of getting passed an impression by a publisher and assigning value based on where it is in the stack. Access to more premium inventory through programmatic pipes also accounts for the higher CPMs – much of header tag spend has been on scarce, valuable inventory.

The simplicity of the transaction accounts for higher CPMs as well and according to Andrew, “shines a light on what has historically really been going on.” Publishers CPMs are higher, but it’s because the working media dollar is stronger in header tag pipes, without the surplus of intermediaries. And by default, “every buy gets better, because we’re cutting that waterfall tax.”

 

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