Are Latin Publishers Adopting Header Bidding? Is the Glass Half Full or Half Empty?
Are digital publishers in the U.S. Hispanic market and Latin America adopting header bidding? Does it really lead to increased transparency between digital media buyers and publishers? We look at these topics and speak to some regional industry leaders to gain insight on header bidding's role in the adoption of programmatic buying.
Header bidding was invented to help publishers find the best prices for ad space inventory through avoiding the trouble spots generated by the waterfall effect of Google’s DoubleClick for Publishers (DFP). Basically, header bidding is a way for digital publishers to directly solicit an essentially simultaneous auction from all the bidders or buyers of digital advertising. While this all sounds nice, publishers in the region have hesitated to adopt header bidding as the rapid pace of the industry makes it near impossible to keep up with (and understand) the latest tools available.
Consensus: Slow Uptake of Header Bidding
The general sentiment in the industry is that Latin America is hesitant to adopt header bidding even when there is great interest and enthusiasm about its existence. Some in the industry started exploring the option early. Natalia Borges, vice president of marketing at Batanga Media, which is active in the U.S. and Latin America, says that the company started to explore header bidding in 2012, but that "the first programmatic header bid impression didn’t come in until July of 2014."
Peter Gervai, Director of AppNexus Latin America, has been pleasantly surprised by the region's awareness of header bidding, but says that much of the interest comes from dissatisfaction with other options: "The level of attention is
inversely proportional to the negativity that other models seem to attract, as publishers see they are loosing value in the more predominant waterfall system, and other competitive systems, that seem to favor one provider over others."
But the biggest obstacle to the adoption of header bidding may be quite simple: it's confusing. Juan Jose Nuñez, founder and CEO of Vertical3 Media, believes that publishers in the U.S. Hispanic and Latin American markets are not taking advantage of header bidding's many benefits due to a "lack of deep knowledge" about programmatic. He continues: "This puts publishers in a very delicate situation because they are seeing how gradually their inventory generates less income and some are considering whether to continue betting big on the model of content generation and news given the lack of advertising revenue."
On the other hand, Gustavo Landivar, Director Digital Platforms at Unidad Editorial, says that his company has not been pushing header bidding to clients, claiming that not all of his clients want that premium space, despite the fact that it generates more revenue.
Will Publishers Adopt Programmatic Thanks to Header Bidding?
The general sense is that header bidding offers great benefits for
those that, as Vertical3 Media, Juan Jose Nuñez says, want to have "greater control over their inventory and receive higher revenue by changing the typical approach of cascade monetization by that of header bidding." But how can publishers come to understand online inventory management and programmatic income generation well enough to make use of header bidding's benefits?
AppNexus' Gervai sees no easy solution, as the industry is simply moving so fast, that "it’s hard to keep up...Not with the ideas and concepts, but with implementing the ideas and concepts. So despite understanding and enthusiasm even, we have seen very little in terms of actual use." Even after talking publishers through the pros and cons of header bidding and dispelling fears about latency issues, there is resistance to the unfamiliar: Having the knowledge, the right concept, the right support seems to be insufficient when you face the 'great inertia.'"
Publishers,especially those pure players that rely more on indirect revenues, are starting to understand the benefits of header bidding.
Google Double Click: A Game Changer?
Ivan Adaime, VP of Digital at Impremedia, echoes the general sentiment that header bidding is not seeing widespread use in Latin America and the U.S. Hispanic market. But he claims that publishers - and especially those "pure players" that "rely more on indirect revenues" - are starting to understand its benefits. He signaled that most are using Google's Double Click and Ad Exchange, and that the upcoming launch of Double Click's First Look will be "nothing more than their answer to header bidding."
How Important is Transparency?
How transparent is the relationship between publishers and buyers? It depends on whom you speak to. Batanga's Borges says that one of the most appealing aspects of header bidding is that it would increase transparency. "Header bidding allows publishers to have more flexibility and a more streamlined, direct relationships with buyers," she claims.
But Adaime cautions the industry not to overestimate header bidding's influence on the adoption of programmatic, as he believes that header bidding essentially "gives publishers using Google's DFP and Ad Exchange a bit more transparency on the bids that they receive for their inventory, especially for the lower tiers of CPM," but that if we are talking about private exchanges or private deals when we say programmatic, header bidding won't have as much of an impact, since those activities are "already pretty transparent, and at the top of the typical waterfall setups of the ad servers."
Only time will tell how the region (and the world) adapts to the many alternatives available to the industry. Programmatic advertising is still new, and probably too complex. In the meantime, no one can blame publishers for resisting something complicated enough to make anyone's head spin.