Header Bidding, Auction Mechanics and preparing for the next evolution of programmatic advertising

Posted by Jonas Jaanimagi On February 22, 2019

As technology continues to drive the adoption of automation in advertising many of the details at the coalface of its operations, particularly in digital, remain a mystery to most of us. There have been dramatic operational changes in programmatic advertising over the past 24 months or so, and we are keen to drive industry alignment in what is a very innovative and commercially aggressive space.

Having a representative group of a publisher (REA Group), vendors (Rubicon Project and MediaMath) and media agencies (Omnicom Media Group and Admatic) come together collaboratively to produce a document on the related mechanics of programmatic trading is an important and symbolic step. Providing education on what header bidding is and its impact – and then to go into some of the finer details of its ramifications and related bidding strategies – was no easy task.

We have already received very useful and constructive feedback on the first version released in December and the second version, released on Feb 22 2019, is now out and available here. We are committed to reviewing the document every 3 months or so as things change so quickly. Please do provide feedback as you see fit and listen to our podcast on the subject with Rohan Creasey, Country Manager, ANZ at Rubicon Project.

Why should we care?

It’s important because the majority of ad volumes are now transacted programmatically, yet there is often not enough open dialogue and alignment on standards, best practices and collaborative innovation. Every other ad type, medium and product will inevitably shift as the advertising industry will always want to be able to trade as effectively and efficiently as technologically possible. We are all increasingly seeing the shift in mobile, outdoor, audio and TV, so the trends and innovations at the executional cutting-edge of established products such as display and video will impact how we trade all advertising in the future. There are, of course, always specific nuances and unique requirements in each area but the overall impact will remain and getting on top of the mechanics sooner rather than later is highly advisable.

Header bidding has democratised the supply of display advertising which is vital for publishers as it provides the opportunity to have their ad products seen by more buyers in real time. Buyers, in turn, are able to have access to more products with more information than ever on what they are buying that meets their requirements; and all in real time. This explosion of available inventory has placed huge demands on the associated technologies and aggressive innovation has resulted. As with most cutting-edge environments, the recommended best practices and industry alignment become an afterthought and things can change very quickly. Hence, we are keen to provide this information now and keep the Auction Mechanics handbook updated on a regular basis.

As a result of all this evolving activity, the industry has to keep step and work hard to ensure that we can all truly leverage the opportunity by collaboratively guaranteeing maximum transparency and ensure responsible business practices through mutually-agreed standards and guidelines. This is managed in practice through the IAB’s protocols for trading ads in real-time (OpenRTB), which have recently been updated to version 3.0 and will be adopted in 2019. These new standards will demand more transparency in everyone’s real-time trading practices.

What is coming next?

IAB Australia currently is forming a working group of its members to help support the adoption of the IAB Tech Lab’s new OpenRTB protocols (version 3.0). Through this group we can evangelise the benefits, locally test the updated software as a representative industry group and support Australian advertisers and publishers through the changes. Commitment to the new protocols is not obligatory initially through the testing phase, but once globally adopted by all of the exchanges it will become mandatory for platforms to shift if they want to trade programmatically.

One critical aspect of the new protocols will be ads.cert – which will work alongside ads.txt in the IAB’s bid to provide industry “standards as solutions” in the ongoing fight against ad fraud in programmatic advertising. Utilising ads.txt effectively provides buyers visibility on who the authorised sellers of any ads are, whist also leveraging ads.cert will provide them full insight on the source of the inventory and authenticate the supply via encryption technology. It will be the combination of these standards that ensures that seller can be authorised and the inventory certified as legitimate. These IAB industry standards, in tandem with sensible marketing principles and quality ad-technology from verified vendors can take the lead in the fight against fraud.

We see the widespread adoption of these tools as being a significant step in the fight against ad-fraud and one which can provide a launchpad for the next wave of collaborative innovation in programmatic advertising. Through documents such as the Auction Mechanics handbook and the OpenRTB working group, IAB Australia are keen to drive awareness of the benefits of the new protocols, help drive the adoption of ads.txt and ads.cert and establish greater trust in programmatic advertising. That way we believe the industry will be able to collaboratively take full advantage of the benefits of this unique set of technologies, without a lack of trust and education (or even worse, enforced regulation) creating friction that will hold us all back.

Jonas Jaanimagi