Last week, Google announced that Exchange Bidding, a real-time bidding solution that allows third-party exchanges to compete with DoubleClick Ad Exchange, is now available to all DoubleClick for Publishers (DFP) customers. 

Exchange Bidding is Google's response to header bidding, which some have suggested poses one of the greatest threats to the world's most powerful digital advertising business.

Announced nearly a year ago, Exchange Bidding gives publishers the ability to allow third party exchanges and supply side platforms (SSPs) to submit real-time bids that are considered alongside bids from the publisher's reservation campaigns and DoubleClick Ad Exchange.

Unlike header bidding, Exchange Bidding doesn't rely on client-side code. This is a potentially big differentiator as one of the biggest concerns around header bidding is that it can increase page load latency. While some publishers have reported substantial double-digit increases in revenue thanks to header bidding, others have also reported double-digit increases in page load times.

There are ways to fight latency, such as using a wrapper solution like Prebid.js and configuring a reasonable timeout setting, but solutions that eliminate client-side code entirely have obvious appeal.

Google says that it is delivering similar lifts in revenue for publishers “without sacrificing user experience across their properties.” For example, programmatic marketplace RhythmOne reports that its publishers using Exchange Bidding have seen a whopping 40% increase in programmatic revenue.

In addition to offering the potential for increased revenue with better performance than header bidding, Google is also playing up the fact that Exchange Bidding allows publishers to consolidate billing and payment. And thanks to new reporting functionality Google unveiled at the time of its announcement, publishers can easily obtain a holistic view of performance.

As DoubleClick's Jonathan Bellack explained:

Exchange Bidding customers can now generate reports across several new dimensions including demand channel, exchange partner, yield group or advertiser on a per-impression level. With these new insights, publishers can make smarter and faster decisions to ensure they're getting the greatest value from every impression.

The end of header bidding?

Given DFP's position in the market, one might ask: is the general availability of Exchange Bidding the beginning of the end for header bidding? 

Perhaps not.

When Google first announced Exchange Bidding, SOVRN, an ad tech firm that is a player in the header bidding ecosystem, suggested that “the influx of new rich data generated by header bidding has enlightened publishers to a new reality and power that they are unlikely to abandon.”

It added, “That isn't to say that publishers won't adopt Exchange Bidding at all. Most publishers utilizing header bidding have one mantra: more competition is always better. If there isn't a large impact on operations, most publishers will continue to increase demand whenever possible. Again, for publishers, efficient and results-based diversification will be key.”

One of the biggest advantages header bidding retains is that publishers have the freedom to choose the demand partners they want to work with without limitation. While Exchange Bidding currently has more than 10 partners, publishers are ultimately limited to the exchanges Google selects. For publishers that are wary of giving up control, that could tip the scales in favor of header bidding.

Even so, Exchange Bidding is evidence of the fact that demand among publishers for greater competition among ad partners is something that even Google has found it can't ignore.

Further reading:

Or check out Econsultancy's programmatic training.

Patricio Robles

Published 10 April, 2018 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (1)

Pete Austin

Pete Austin, Founder and Author at Fresh Relevance

Best link I found to explain header bidding. It's called that because the code lives in the HTML page header so it can execute as early as possible, before anything else loads..
http://adprofs.co/beginners-guide-to-header-bidding/

Interesting how adtech vendors make their script execute first, even though this must slow down the page load time. We in contrast make our personalization script execute last (asynchronously) to avoid slowing down the page. (No link because we literally don't mention this anywhere - I guess we assumed it was obviously the right thing to do.)

3 months ago

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