Is Server-To-Server Header Bidding Right For You? What You Need To Know

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Marylou Skinner
5 years ago
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1 Is Server-To-Server Header Bidding Right For You? What You Need To Know

2 Over the first few months of 2017, server-to-server header bidding has made its mark as one of the most talked-about ad-tech trends of the new year. Publishers are excited about this new monetization technique s power to improve on the client-side header bidding auctions that dominated conversation in And yet, for all the buzz surrounding server-to-server (S2S) header bidding, most publishers remain uncertain as to when and how they should begin experimenting with it. Indeed, many of them are still working to understand how, exactly, this new technique differs from its client-side predecessor. Here, we ll take a quick look under the hood to give you all the information you need to decide whether server-to-server header bidding is right for you.

3 S2S speeds up header bidding auctions and improves the user experience. During the past two years, top publishers from all over the world have implemented client-side header bidding to maximize their ad revenues in a fairer, more transparent auction. By letting header bidding partners bid on every auction and compete within the ad server, publishers have been making more money. S2S header bidding is relatively new, but it s useful to note that publishers have been using server-toserver technology for years. Whereas an SSP uses a server-to-server connection to call multiple DSPs simultaneously, an S2S header bidding server uses the same protocol to call multiple SSPs. The key difference between client-side and S2S header bidding lies in how the auction is executed. In a client-side implementation, the publisher solicits bids by making an ad call from the user s browser to each of the participating exchanges. With each additional demand partner, the publisher places a greater burden on the browser, slowing down page load times in the process. If a publisher adds more than seven partners to its client-side header bidding auction, they re risking the user experience, as pages will take longer to load. They could also hurt monetization since many partners won t be able to respond with bids before the timeout. In order to alleviate this problem, publishers began experimenting with S2S implementations. In an S2S auction, the publisher makes a single call from the web page to a third-party server, which then calls the publisher s demand partners itself, instead of having the user s browser do it. Servers are much faster than browsers in their ability to make these calls, and as a result, S2S publishers can enjoy increased auction capacity with less concern about increasing latency.

4 S2S expands the auction to more partners, but match rates and transparency take a hit. For publishers, S2S offers a complex slate of pros and cons. On the positive side of the equation, S2S reduces latency as compared to a client-side integration, even as more partners are added. This not only improves the user experience, but also allows publishers to include a greater number of demand partners in the auction. And since more demand partners means more competition, an expanded auction has the potential to generate higher CPMs and a superior long-term yield. As an added bonus, moving the auction to a vendor-owned server gives publishers one less thing to worry about from an operational standpoint. However, S2S has some potential side effects that must be taken seriously. Because S2S publishers do not call their demand partners directly from the webpage, it s much harder for the two sides to match cookies. This is a major problem, as buyers are unwilling to pay much for an impression unless they can identify the user at the other end. While client-side header bidding integrations offer cookie match rates of nearly 100%, early data suggests S2S setups may drop match rates to around 70%. The other potential drawback to S2S is that its auction mechanics are less transparent than client-side setups. Client-side header bidding can be executed via open-source code on the publisher page, meaning that media companies can monitor the auction for any signs of impropriety. By contrast, S2S auctions have to take place in a third-party server that is essentially a black box from the publisher s perspective. As such, media companies have no choice but to hope that their technology partner isn t taking an unfair cut of their ad revenues or prioritizing one demand partner over the others.

5 Here s a chart comparing the key features of client-side and server-side header bidding. CLIENT-SIDE HEADER BIDDING S2S HEADER BIDDING PRIMARY BENEFIT EXECUTION Allows publishers to accept bids from multiple demand partners simultaneously The webpage calls all demand partners directly Allows publishers to accept bids from even more demand partners simultaneously An adserver calls demand partners after receiving a single call from the webpage AUCTION CAPACITY Up to seven demand partners (considered best practice) Not a concern LATENCY Increases with every new auction participant Remains stable as new partners are added COOKIE MATCH RATES Close to 100% May reduce cookie match rates OPERATIONAL BURDEN The publisher is responsible for managing the auction on its webpage The vendor is responsible for managing the auction inside its server PUBLISHER OVERSIGHT Can be fully transparent, via open-source code on the publisher page Opaque, via a black-box auction held inside a private third-party server

6 Only you can decide what s best for your business. When choosing a header bidding setup, the most important thing for publishers is to remain mindful of their specific business objectives. Perhaps user experience is your foremost concern, and an S2S setup is the best way for you to improve it. Or maybe your client-side implementation is already delivering the results you re seeking, and there s no sense messing with what isn t broken. It s even possible that the way forward will be a mix-and-match scenario, where some demand partners reside in a client-side auction and others are funneled into S2S bidding. Ultimately, every publisher has a unique set of business circumstances, and there s no one-size-fits-all gameplan. But by remaining focused on your KPIs and keeping up with the latest in header bidding technology, you ll be wellpositioned to find the solution that works best for you. And if you re still having trouble making a decision, an AppNexus representative would be more than happy to offer some advice. Please don t hesitate to reach out.

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5 QUESTIONS TO ASK WHEN CONSIDERING SERVER SIDE HEADER BIDDING

5 QUESTIONS TO ASK WHEN CONSIDERING SERVER SIDE HEADER BIDDING Introduction Server side (s2s) integrations have existed in programmatic advertising for nearly a decade, having been the preferred method