True In-App Header Bidding: Separating Fact From Fiction
Mary Meeker’s latest Internet Trends Report highlights a fact many of us are familiar with: consumers are shifting their time to mobile faster than ad spend is following, which essentially leaves a $7 billion mobile ad opportunity on the table.
Of this time consumers spend in mobile, roughly 85% is spent in app. It’s therefore no surprise that more focus of advertisers and monetization platforms is being shifted to mobile apps. In-app header bidding is the latest monetization technique the market has been abuzz about.
With various platforms claiming they have a unified auction or an in-app header bidding solution, it’s time to differentiate between truth and fiction when it comes to new mobile monetization strategies.
No one can argue the value header bidding introduced to the web ecosystem—publishers have reported upwards of 40% higher CPMs. While header bidding is technically harder to execute in the in-app environment, the expectation is that mobile app publishers will reap similar rewards. That said, the in-app environment is inherently different, and requires a different approach to achieve a “true state of header bidding” in this “header-less” space. Here are a few thoughts that can help shed light on some of the solutions out there.
If it looks like a waterfall, and works like a waterfall, then it’s probably a waterfall
In many ways, the fact that the in-app environment is behind when it comes to header bidding is a golden opportunity to build a holistic, “auction-minded” monetization solution rather than a hack that inserts an auction on top of a waterfall. The aforementioned waterfall is the leading method today for publishers to rank their demand sources from highest expected eCPM to lowest. Unfortunately, not all those who claim to deliver in-app header bidding solutions follow this route, or in other words, true in-app header bidding solutions don’t replicate the web header bidding approach. This is because:
- Waterfalls hinder the value of header bidding. Calling a waterfall after the auction takes place means that not all demand has equal access to the publisher’s inventory, which is what header bidding is all about. As long as there’s a waterfall, there will be manual work involved in optimizing it, losing one of the main advantages of moving to an auction environment.
- As long as there’s a waterfall, latency (and the poor user experience that comes with it) is going to be an issue.
Waterfall-based platforms are often black boxes susceptible to manipulation, and impossible to audit. Publishers need tools to help them better understand and maneuver away from waterfall techniques which prevent demand sources from participating simultaneously, essentially eliminating the possibility of a truly unified auction.
Some companies offer hybrid solutions that have an auction, but they still rely heavily on a waterfall. Other companies glorify the unified auction, but forget to mention that the auction is then followed by a…waterfall.
These types of companies are likely trying to preserve the advantage that the waterfall enables them to have for their own demand. They aren’t thinking about what’s best for the publisher, and not giving a truly equal and fair shot to all demand sources.
Scenarios certainly do exist in which it makes sense for a publisher to prioritize a specific demand partner over the unified auction (similar to programmatic direct deal). But this should be the result of a sound and tangible business reason—for example, a direct deal with an advertiser that has price and impression volume commitments, or a private marketplace (PMP) in which the publisher negotiated a smaller auction with a select group of buyers for a premium price.
Transparency and control as more than just slogans
But more is needed than an auction—unified as it may be—to realize the full potential of header bidding. Here are four critical elements publishers must keep in mind when searching for a true in-app header bidding solution:
- Granular and transparent reporting that provides visibility to all demand partners in one place and includes auction-related parameters, in order to produce actionable insights and unlock new growth opportunities.
- Tools to manage demand partners and optimize traffic allocation at the placement level, in order to turn insights into action.
- Audience segmentation tools that enable publishers to understand the true market value of their inventory, optimizing their pricing in real time.
- The ability to reach out to demand partners directly in order to easily set up direct deals and PMPs for premium inventory.
Learn from others
The luxury of learning from past header bidding mistakes and success stories should not be taken for granted. Making the necessary adaptations for mobile in-app should go beyond solving for the technical challenges of the in-app unified auction, seizing the opportunity to provide publishers with a primary monetization platform that includes all the tools needed to grow their business. Those companies that are building their in-app header bidding solutions based on the lessons learned will be best equipped to support publishers in their journey away from the shortcomings of waterfall-based monetization.
For more information, we share everything you need to know about in-app header bidding and unified auctions in our beginner’s guide, From In-App Header Bidding to Unified Auctions. Check it out.