All You Need To Know About Publisher Waterfall and Header Bidding

Have you heard about publisher waterfall or header bidding? I will provide you with all the facts you need to know about these two types of inventory access and how you can become more efficient when buying media via Private Marketplace deals.

How does publisher waterfall work?

In a traditional ad server waterfall set up publishers will start by selling impressions with one SSP (SS1 e.g, AdX) at a high price floor. If the impressions don’t get picked up, publishers push them to second (SSP2 e.g. Pubmatic) or sometimes third SSPs (SSP3 e.g. Rubicon) at lower price floors until they do.

AdX has an advantage against all other ad exchanges due to the close tie in with Google’s DoubleClick for Publishers which is often the preferred publisher’s ad serve. Also, Google has rolled out a technology called “enhanced dynamic allocation” allowing exchange demand to compete with certain classes of direct placements on a CPM basis. For example, if a direct placement is pacing close to deliver at a $5 CPM and the exchange brings demand at a $10 CPM for an impression, AdX will allocate that impression to the exchange demand. Thus, major publishers will typically turn this feature on and use AdX as the first SSP in their stack.

In order to ensure you are not paying a premium for a second SSP, there are a few questions you should ask the publisher when negotiating Private Marketplace deals:

What is your primary SSP?

Where does each SSP sit in the demand waterfall?

Do any SSPs see different inventory allocations?

If AdX is an SSP the publisher uses, is enhanced dynamic allocation turned on?

What kinds of PMP offerings are available (e.g., Preferred Deal, Private Auction, First Look)?

Is supply brought into exchange from publisher, or ad network handling portion of supply?

Is any inventory available in PMP that is not available in open market?

How does Header Bidding work?

Most recently, sellers have started implementing a new technology called Header Bidding that allows exchanges to access inventory before the publisher ad server is called and it allows for custom and non-standard creative executions. To enable it, publishers put a piece of code in the header of their pages. This approach is becoming more popular among programmatic buyers and it allows them to bypass the favorable relationship between Google’s DoubleClick for Publishers ad serve and its exchange AdX. In essence, Header Bidding allows for a single unified auction where demand sources compete side by side rather than sequentially (waterfall), ultimately yielding higher CPMs.

Not all publishers are supporting Header Bidding just yet. Some of the publishers that are supporting this new technology includes CafeMom, Hearst Magazines, Hearst News, All Recipes, etc.

If you are currently running Private Marketplace deals, do your due diligence and ask questions to publishers to ensure you are not over paying for inventory.