Server-to-Server Connections Make the Perfect Match

There has been quite a bit of buzz in the online ad industry over unified auctions over the past year, with much of it centering on server 2 server connections and header bidding. Some consider the former to be a more effective way to accomplish the same goal as the latter.

Of course, as with any strategy, opinions about s2s vary according to the people talking about it. The best way to figure out whether or not it may prove a good fit for your business is to discuss why the need for unified auctions arose and how each bidding approach works.

 

In the Beginning, There Was Header Bidding

For several years, publishers suffered from lack of sufficient information about projected bids and a place at the back of the line in terms of bidding order. This often cost publishers money and also damaged important relationships, as it contributed to a certain level of alienation between Google and publishers.

One initial solution to this issue was header bidding, which leveled the playing field for demand by allowing buyers to bid on ads simultaneously. Unfortunately, as more demand sources are added to a wrapper tag, the risk of page-load latencies increases. In an era when ad blocking is a major concern for publishers, the latency factor poses a serious problem. This factor has led to some industry players dismissing this approach as a hack.

However, in order to fully understand the merits of server 2 server connections, it is critical to first take a look at the benefits that header bidding offers. Namely, by empowering buyers to bid simultaneously, it helps improve publishers’ programmatic ad yields. Publishers reap the rewards of the spike in competition.

 

The Advantages of S2S

But the latency issue remains. It is the main reason server 2 server exists. Theoretically, publishers who choose this option can offload the bidding process to the ad tech vendor’s server, thereby circumventing the risk of page-load latencies. It also liberates publishers to plug in a virtually unlimited number of demand sources, as they no longer need to concern themselves with the risk of overload.

And by integrating all partners into the server, this approach streamlines the process for publishers – a significant point because of the technical issues posed by the browser port limitations associated with header bidding. The excessive number of partners in relation to ports can knock some partners out of the running, potentially denying publishers access to the best bids. S2S, on the other hand, makes it possible to call multiple partners simultaneously. The end result? A higher yield for publishers.

History is often the greatest indicator of future successes and the same could be said about this strategy. Developers have been incorporating server 2 server into mobile in-apps from the beginning to meet the demands of their speed-sensitive environment. With loading time being a make-or-break factor for mobile, this widespread adoption speaks volumes about its performance.

No approach is perfect and s2s has its drawbacks. That said, it is quickly gaining a reputation as an improvement on header bidding and a valid way to increase yield for publishers. MediaFuse is here to consult publishers with server 2 server connections.

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Google Creates a Bold Alternative to Header Bidding

In April of 2016, Google turned the ad tech world on its head when it announced that it was in the process of testing a pilot program that would give all bidders equal footing in the competition for ad inventory on websites. Industry media erupted, proclaiming that the program, which the search giant dubbed exchange bidding in dynamic allocation (EBDA), was the death knell for header bidding.

Publishers and demand sources have been fans of the bidding tactic because it gives them a head start and an edge on submitting bids on impressions. It accomplishes this in two ways: by allowing partners to act before the ad call goes out and by providing precise tags within the ad server. This gives partners the power to compete with AdX’s real-time bids, theoretically decreasing the chances that publishers will lose money due to inaccurate bid impressions. Historically, it has been used by competitors of Google to reclaim their stake in the auctions.

 

Debunking the Mystery of EBDA

Header bidding was created in response to discord in the ad space over the information advantage Google held in auctions. It gets its name from the code, placed in the headers of websites, that displays ad inventory for rival exchanges. They could access this information before Google, essentially cutting in line to bid for desirable impressions.

With EBDA, Google is making the auction process more transparent by allowing rival exchanges to view the same information available to Google’s ad exchange. It is a major departure from the previous policy, which weighed heavily on publishers. Now, AdX will shoulder the burden.

Unlike in header bidding, publishers can invite SSPs and trusted third-party exchanges to submit real-time prices using industry-standard RTB calls. The publisher’s reservation campaigns and DoubleClick Ad Exchange will also toss their hats into the ring. In the end, the highest-paying ad will prevail.

 

The Industry Impact of EBDA

The rise of EBDA will not necessarily precipitate the demise of header bidding. First and foremost, the bidding tactic’s future depends largely on just how open Google makes dynamic allocation. If publishers are left wanting more, header bidding may remain available as an option.

In order for EBDA to obtain a foothold, it must also deliver on its promise that publishers can work directly with the demand partners they find most desirable. Its success hinges on demand partners benefitting, as well; if EBDA pushes a tax requirement on demand partners, header bidding could retain its advantage.

In a competitive marketplace, the two methods can co-exist, with a number of formidable companies creating their own server-side integrations. Ultimately, in order to succeed, they will need to develop an effective publisher product before the servers who are also in the game build server 2 server connections. This equation is clear: publisher product plus server connections equals winners.

Google stands to gain a great deal if it can gain favor with the publishers that AdX and the information imbalance alienated. In fact, the number of publishers stepping up to partner with Google in the EBDA pilot continues to grow. Regardless of the outcome, this is undoubtedly a time of epic transformation for the ad tech space.

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