Our kids are young and rough on their clothes, so my wife often visits what are called \u201ctag sales.\u201d It\u2019s one of those things that I didn\u2019t realize existed prior to becoming a parent. A mother\u2019s club usually organizes a tag sale and it\u2019s basically a large yard sale where everything is tagged with a color-coded price tag.<\/p>\n
Because the inventory is sort of random and inherently limited, you\u2019re far better off arriving early. So tag sales often end up looking like a Walmart on Black Friday, with people lined up early in the morning waiting to get in. All this to get the most desirable used clothes.<\/p>\n
If you\u2019ve been running ads you might have noticed that the competition for your inventory is a lot like that tag sale. There are many entities that want to take the first look at what you have to offer and buy it for themselves before anyone else takes a look. <\/p>\n
Header bidding for apps is an auction that runs before the ad server auction and produces a single winner with the highest bid for the ad impression. That bid then competes inside your normal ad server auction for the final win of the impression and delivery of the ad.<\/em><\/p>\n That was a mouthful. Let’s break that down a bit. <\/p>\n The incentives of the players in the ad ecosystem are usually misaligned. Buyers want to cherry pick ad impressions at the lowest price possible, and sellers need to sell all<\/em> their inventory at the highest possible price.<\/p>\n For ad buyers, their ideal situation is to look at every ad impression and then take the ones they want before anyone else sees them (i.e. the tag sale). However, most ad servers can only accommodate ONE buyer in that coveted position.<\/p>\n That’s bad for the ad seller (publisher) because while they can demand that the price be above a certain level (called a “floor” price), they can’t take advantage of auction dynamics to drive up the price. <\/p>\n There is one entity that is in a position to see all inventory and pick off what they want…the company running the ad server. That’s a very profitable position to be in, so companies like Google and MoPub have done very well for themselves by running the ad server and the auction for impressions. <\/p>\n In the web environment, this has been going on for a long time. When Google bought DoubleClick, they took over one of the dominant ad servers and got access to a lot of publisher inventory. They then created their ad exchange (AdX) and gave it the first look at all that inventory. Other ad exchanges view that as an unfair advantage (and I agree that it is). <\/p>\n That worked very well for Google for quite some time. In the past few years, a technology called header bidding has been gaining steam. Header bidding was created specifically to deprive Google of that unfair advantage in looking at all the inventory first.<\/p>\n Header bidding allows competing ad companies to bid in an auction that is run in the header of the web page, before Google gets a chance to see the impression. The winning bid from the header auction is entered in Google’s normal auction as a line item and only becomes an ad impression if it also wins Google’s auction. <\/p>\n This allows companies other than Google to participate at the earliest stage, increasing the bid density (more bids is better for the seller, like any other auction) and producing more revenue due to the increased competition. Header bidding has been a big win for web publishers.<\/p>\n This same exact situation also exists in the mobile app environment. There are ad servers and SSPs with dominant market positions–like MoPub, and again, Google–who use their optimization layer to give their own exchange the first look at an app\u2019s ad inventory. This of course benefits those companies and aggravates competitors and app publishers seeking the highest price for each impression.<\/p>\n Side note: The question mark in the sub-heading is because apps don’t have headers. There is no universal name yet for this technology in the app environment so most people continue to call it “in-app header bidding” because everyone knows what it means even though it is technically inaccurate.<\/p>\n One of the first header bidding technologies for apps was just released this week when AppNexus introduced their PriceCheck (http:\/\/www.prnewswire.com\/news-releases\/appnexus-announces-launch-of-pricecheck-header-bidding-for-mobile-apps-300209082.html) product. The mobile app world has an additional challenge for ad companies that want you to use their products, which is that they usually require you to install an SDK. It used to be easy to get app developers to throw in another SDK, but those days are long gone. Every SDK comes with potential problems so developers have become extremely selective about which ones to use.<\/p>\n So AppNexus killed two birds with one stone by making PriceCheck available with just a few lines of code. It\u2019s very light and pre-caches ads to contribute \u201cvirtually zero latency\u201d to your app\u2019s user experience. That\u2019s a claim that can\u2019t be made about header bidding in the web world.<\/p>\n Other companies will no doubt follow AppNexus\u2019 lead with very similar solutions in the near future. And as long as the latency remains very low and the additions don\u2019t bloat your apps, I don\u2019t see any reason not to participate. My philosophy is that it\u2019s beneficial to be plugged into as many unique demand sources as possible. AppNexus is a huge exchange and no doubt has some demand that is unduplicated by the MoPub exchange and other prominent app inventory exchanges. Header bidding for apps could be a relatively easy way to expose your app to new demand sources.<\/p>\n","protected":false},"excerpt":{"rendered":" Our kids are young and rough on their clothes, so my wife often visits what are called \u201ctag sales.\u201d It\u2019s one of those things that I didn\u2019t realize existed prior to becoming a parent. A mother\u2019s club usually organizes a tag sale and it\u2019s basically a large yard sale where everything is tagged with a […]<\/p>\n","protected":false},"author":1,"featured_media":215,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[9],"tags":[],"_links":{"self":[{"href":"https:\/\/arpuinsider.com\/wp-json\/wp\/v2\/posts\/109"}],"collection":[{"href":"https:\/\/arpuinsider.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arpuinsider.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/arpuinsider.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/arpuinsider.com\/wp-json\/wp\/v2\/comments?post=109"}],"version-history":[{"count":21,"href":"https:\/\/arpuinsider.com\/wp-json\/wp\/v2\/posts\/109\/revisions"}],"predecessor-version":[{"id":263,"href":"https:\/\/arpuinsider.com\/wp-json\/wp\/v2\/posts\/109\/revisions\/263"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/arpuinsider.com\/wp-json\/wp\/v2\/media\/215"}],"wp:attachment":[{"href":"https:\/\/arpuinsider.com\/wp-json\/wp\/v2\/media?parent=109"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arpuinsider.com\/wp-json\/wp\/v2\/categories?post=109"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arpuinsider.com\/wp-json\/wp\/v2\/tags?post=109"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The Fundamental Conflict<\/h2>\n
The Rise of Header Bidding<\/h2>\n
In-App Header(?) Bidding<\/h2>\n