Wave 2 Blog
The move is effectively a shortcut for Facebook to bring its demand to publishers while taking on Google at the same time. This, of course, is a huge competitive move against Google, whose Doubleclick product dominates much of the publishing industry.
Now, as it turns out, publishers like the Washington Post, the Daily Mail and Forbes, have been quietly working with Facebook to introduce this to the Facebook Audience Network. It gives them the ability to receive ads bought through Facebook’s sophisticated data and targeting technology.
Also known as advance bidding or pre-bidding, it is an advanced programmatic technique wherein publishers offer inventory to multiple ad exchanges simultaneously before making calls to their ad servers. Consider that these ad servers are mostly DoubleClick for Publishers (from Google) and you can instantly see the competitive move here by Facebook.
The next question is, of course, “Why is do publishers do this”?
Well, the biggest benefit that header bidding offers is greater yield. Some studies indicate that just a single header bid source can increase yield by 10 %. More, if the publisher combines their whole inventory into a single server-side supply, as they can then sell inventory on a per-impression basis.
While this all sounds great and certainly very cool, there are some negatives associated with the concept. First of all, it is quite complicated to setup and implement. But the biggest risk is the fact It can play havoc with page latency. You see, to make the process of bidding work, special tags need to be inserted into the web pages and every tag – each of the Supply Side Platforms (SSPs) has one – potentially adds an additional layer of “lag” to the time it takes to render the page. It simply slows down web pages and that is the main reason people started to install ad blockers. These simply prevent the whole bidding process from happening.
Now, with Facebook joining the fray, things will get interesting, especially as Facebook has a “Mobile First” approach. What it also means is, Mobile advertising will grow even more and probably faster too.