Mobile Header Bidding From a Publisher's Perspective

This post was originally published on Brunch on January 28, 2019.

On November 30th, I had the opportunity to participate as a panelist at the MoPub Momentum event hosted by MoPub, a global ad exchange operated by Twitter.

The The rise of in-app bidding session I attended featured representatives from MoPub, Facebook, iHandySoft, and DelightRoom discussing in-app bidding—header bidding for mobile apps—from the distinct perspectives of an ad network, an ad exchange, and a publisher. In this post, I'd like to briefly summarize the points I shared from a publisher's point of view.

To briefly introduce header bidding, it is a method where auctions take place simultaneously across multiple ad networks and ad exchanges. In the context of mobile apps, it's sometimes just called header bidding, but since the term originated and is widely used in the web industry, we often differentiate it by calling it in-app bidding.

Many ad-tech companies in the mobile app industry have started talking about moving toward in-app bidding, but most are still stuck in the beta stage. For example, both MoPub's Advanced Bidding and AdMob's Open Bidding platforms, which apply this technology, are currently operating as beta versions. In MoPub's case, there are only three ad networks integrated into the platform so far: Facebook Audience Network, Tapjoy, and AdColony.

From a publisher's standpoint, in-app bidding is theoretically a highly beneficial technology. Compared to the traditional waterfall approach, which assigns priorities to various ad networks and ad exchanges to request ads sequentially, this technology has several advantages.

First, from a performance perspective, requesting ads simultaneously from multiple ad networks and ad exchanges minimizes ad latency and maximizes valid impressions. Also, instead of prioritizing based on historical ad price data, it guarantees higher ad prices through real-time auctions. More valid impressions and higher prices are the ultimate goals every publisher strives for.

From an operations and management perspective, in-app bidding also brings efficiency improvements. In the traditional waterfall approach, priorities between ad networks and ad exchanges are set based on historical data, which incurs operational costs. If you try to run more sophisticated operations by segmenting by ad unit or country, those costs increase exponentially. While you could automate this to some extent, it clearly has limitations compared to in-app bidding, where the very concept of priority becomes obsolete thanks to real-time auctions.

Although in-app bidding has many advantages, it will likely take some time before we can fully enjoy them. As mentioned earlier, platforms utilizing this technology are still in their infancy, and most importantly, it's hard to leverage these benefits 100% until every single ad network and ad exchange enters the in-app bidding ecosystem. In a situation where platforms that don't support in-app bidding coexist with those that do, we still have to use the traditional priority-based waterfall approach between them.

Wrapping up

Both publishers and advertisers recognize the need for and advantages of in-app bidding, and it is clear that the industry is steadily moving in this direction. As a publisher, I look forward to seeing as many platforms as possible adopt and utilize this technology as quickly as possible.

Finally, I'd like to share the official summary of the 'The rise of in-app bidding' session provided by the event host, MoPub.

A quick recap of what we have discussed in ‘The rise of in-app bidding’

It will take some time for the whole market to shift completely towards real-time buying, but now is the time to get in motion — publishers are calling for it, and buyers understand the efficiencies. One of the most fundamental problems we see in the in-app ad economy today is the lack of a reasonably true value for each impression because not all demand sources bid in real-time. The current waterfall approach gives some players an advantage because they’re at the top, and someone willing to pay more for an impression might not be able to bid on it. This practice hurts yield for publishers, who might be leaving money on the table, and also hurts ROI for advertisers. It also causes publishers to spend significant time managing the operations of each deal, which can be time consuming. Buyers want equal access to the most valuable impressions, and allowing all demand sources to bid in real time will facilitate this. A platform that does mobile-app header bidding ‘right’ will promote the importance of mobile-first technology, auction transparency, and allow for equal opportunity bidding.

DelightRoom is always hiring for various positions, so we'd love your interest and applications.