Like many other technologies before it, programmatic advertising is constantly evolving, with the overall aim of improving performance and profit. And as the central value provider in media, publishers have seen the sophistication of their monetization strategies evolve alongside it. It transformed trading methods for publishers, from paper insertion orders and faxes to online platforms and algorithms.
But how to prioritize the various direct, and programmatic buyers and campaigns within the ad server? For a long time, the standard for publishers to maximize their yield was the so-called waterfall method (also called daisy chaining). How this worked was to prioritize the various buyers in order, and cascade down each in turn – hence the waterfall.
In other words, the impression would be offered to the one at the top, and if unsold then pass to the next and so on (aka passback). On paper, it sounded great, but the waterfall also had disadvantages. First, it is challenging for publishers to estimate the true value of their inventory by partner at all times, which can ultimately lead to impressions to be devalued, and therefore a loss of revenue. Since buyers apply different bids for every impression, it is impossible to know if the first partner selected in the waterfall is necessarily the one that will bring the most revenue all of the time. Second, passbacks can also create latency. As ad calls are made sequentially they must be passed again and again to each partner in the waterfall, which can impact page loading times, causing a poor user experience. The chart below represents a classic publisher waterfall setup.
Fortunately, header bidding emerged to tackle the waterfall’s inefficiencies. In a header bidding setup, ad calls are made simultaneously – which fosters more competition in real-time, increasing publishers’ yield and CPMs. Technically, it involves adding a header bidding wrapper, also called container – essentially a piece of code – in the header element of a publisher website, enabling them to easily add or remove demand partners.
One of the most well-known and popular wrappers in the industry is the open source prebid.js. It was first created and launched in 2015 by AppNexus, but as transparency is a huge debate in the ecosystem, since 2017 prebid.org has acted as an independent organization. You can see below the growing header bidding adoption rates from October 2018 to February 2019.
The different flavors of header bidding: client versus server-side
a. How does client-side header bidding work?
– Cookie Matching: Cookie matching is complete as demand partners have direct access to users’ cookies which also results in higher yield.
– Increased Fill Rate: The fill rate increases as more demand partners are added to the wrapper.
– More Control: Detailed understanding of partners’ bidding behaviors and easy reporting on key metrics to further optimize.
– Page Latency: Page load time increases if too many demand partners are added to the header bidding wrapper, which can result in poor user experience and ultimately lower revenue if users abandon the website.
– Limited Number of Demand Partners: The number of demand partners that can be added in the wrapper is somewhat limited due to the reasons above. In general, the average number of header bidding demand partners is between 3-5.
– Bid Duplication: One of the main potential drawbacks – as the same impression may be available across various demand partners at the same time, resulting in a duplication of bids.
– Heavy Technical Setup: The initial setup is heavy since the wrapper needs to be added to the header and the different line items need to all be created in the ad server.
b. How does server-side header bidding work?
Server-side header bidding works similarly to the client-side variety. The difference being, instead of sending bid requests from the browser, it sends them to the different header bidding partners via an external server, where the auction is held remotely.
– User Experience: Page latency and slow loading times are less of an issue – therefore, user experience is not adversely affected, since the auction is held on a 3rd party server.
– More Demand Partners: Header bidding was first introduced to foster competition between demand partners. Since server-side setups allow more partners to be added, technically that should mean greater pricing pressure and higher revenues.
– Easy Integration: Simple technical setup compared to client-side header bidding, depending on the server side header bidding technology partner.
– Cookie Matching: As the auction is happening on an external server, instead of the web page header, the cookie match rate is lower, which can impact yields where targeting is not possible.
– Less Transparency: With the auctions happening in an external server, publishers may have less transparency on the revenue share that applies, as well as less control over prioritization of demand partners.
– Bid Duplication: One of the main potential drawbacks – as the same impression may be available across various demand partners at the same time, resulting in a duplication of bids. The risk here is similar to that faced in client-side setups.
To summarize, header bidding gives publishers more power and flexibility to manage different demand partners and increase revenue. However, as with any relatively new technology, header bidding is also far from being complete, or fully featured as yet. If you want to understand more about the next stages of header bidding, and where it will go next, read Rivr’s CTO Moti Tal article recently published in Exchangewire.
Rivr is the first audience yield manager for programmatic publishers. Get in touch to start optimizing your yield on a user level.
Programmatic Industry Must-Reads: March
The Rivr Monthly Programmatic Industry Must-Reads.
Our monthly post includes a recap of the latest programmatic industry news.
1. WTF is a unified ad auction? – Digiday
“Unified auctions have replaced the more traditional waterfall model. In a unified auction, multiple ad exchanges can have access to the same publisher inventory, at the same time and bid accordingly. The former waterfall model was more like a hierarchy where Google had first (and often last) dibs on bidding, followed by the next exchange in the waterfall. Anything those two vendors didn’t want, was then passed to the next SSP in the chain and so on until the inventory sold. Unified auctions helped publishers make more ad revenue because having more SSPs and exchanges bidding for their inventory drove up prices.”
2. Google Is Moving To First-Price, But Big Questions Remain – AdExchanger
“Google’s move to create unified, first-price auctions for publishers using Google Ad Manager doesn’t just change the auction type. It impacts pricing, header bidding, publisher floors and how publishers see AdWords demand. Under the new rules, all exchanges will bid for an impression at the same time, and Google will lose the “last look” it reserved for itself to outbid its fellow exchanges via a second-price auction.”
3. As the Cookie Crumbles, What’s on the Horizon for Identity Data? – Exchangewire
“With browsers such as Safari and Firefox blocking third-party cookies, more publishers are beginning to look for new ways to utilise their rich customer data, enabling them to deliver the same level of targeting that Facebook and Google have made commonplace. To date, attempts to do so have been hampered by a lack of privacy-safe technology to navigate the ever-increasing expanse of consumer data, fragmented across disparate data silos.”
4. Programmatic Hasn’t Been Able to Live Up to Its Potential – Adweek
“Programmatic advertising today is at a crossroads, and if advertising on the open web is ever going to catch up with the walled gardens, there needs to be a fundamental reset in terms of approach.”
5. IAB Tech Lab Releases Final Version Of App-Ads.Txt – MediaPost
“The IAB Tech Lab’s OpenRTB working group has released the final version of the app-ads.txt standard, an extension of ads.txt designed to help combat digital advertising fraud in mobile apps and on OTT. The final release version of app-ads.txt will “usher in a rapid wave of adoption by app developers and programmatic media buyers,” the IAB Tech Lab says. The beta period is over, allowing for more widespread adoption by players in the digital media ecosystem.”
SSP Case Study
One of our partners, a European-based SSP, was looking to increase its revenue performance while simultaneously decrease its operational costs.
They were excited to see how Rivr’s audience authentication algorithms would enable floor pricing and demand selection on the user level.
Download our case study to learn how Rivr increases revenue performance and decreases operating costs.
Where should we send our case study?
The programmatic ecosystem once held great promise.
Today, programmatic advertising is bloated, complicated, and inefficient. Supply and demand lack a common language with which to classify and value users.
Download our summary to learn how Rivr closes the programmatic gap between advertisers and publishers.
Where should we send our summary?
Rivr Audience Yield Manager — Outline of The Tour
For the last year, Simplaex has been developing our Audience Yield Manager called Rivr. Thanks to the input of our beta partners, we’ve developed a fantastic platform that allows Publishers and SSPs to set the right floor price and select the relevant demand partners — on the audience level.
Now it’s time to hit the road and share Rivr with the rest of the world!
In order to do that, I’m about to embark on a tour across Europe and North America, making stops in various conferences and sundry cities.
For those who like stats, take a gander at this. This tour will include:
– 8 events
– 7 cities
– 16 flights
– 64 hours in the air
This doesn’t take into account a number of smaller trips to Paris, Hamburg, San Francisco, Tel Aviv and London!
Berlin is nicely bookending this tour. We’ll be starting off easy with Mobile Growth Summit in Berlin as the first stop. The last event will be Simplaex’s own event at the start of December back in Berlin! A nice way of celebrating the finish of the tour with an event in our own backyard.
For now, I’m going to rest up, stretch (never want to pull a hammy!) and prepare for the adventure. First Stop — MGS Berlin!
Meet The Berlin Startup Trying To Fix All Of Programmatic’s Problems
Rivr — billed as a universal translator for the programmatic ecosystem — is trying to refine the transaction process. Can a small startup achieve the ambitious goal of simplifying a crowded marketplace?
In my short time covering the martech space, one thing has quickly become clear: Marketing exists in theory and in practice. The gold standard for marketers is for their customers not even to notice they’re being marketed to — to deliver the exact right thing to the exact right person at the exact right time. Yet, with technological innovation comes technological difficulty, and noble as the programmatic advertising space is in its quest to maximize efficiency, there are more than a few efficiency gaps.
Enter: A small Berlin-based startup, Simplaex, that made a big announcement in June at AdMonsters 2018 Ops Conference in New York City. It announced the beta-launch of a project called Rivr — billed as a universal translator for the programmatic value chain to classify audiences and support SSPs and publishers to understand and anticipate any change in the bid stream on an audience level.
“In our conversations with advertisers, publishers and SSPs, we heard a number of recurring themes, all related to the fragmentation of the programmatic supply chain. Rivr addresses these themes head on without adding another layer to the tech stack,” said Simplaex CEO Jeffry van Ede in June.
I recently spoke with Benjamin Hansz, Simplaex’s VP of strategy, to discuss how the solution works, and what it might mean for the future of managing audiences in the programmatic marketplace.
In theory, Hansz said, a publisher is connected to an SSP, the SSP is then connected to the hundreds of different demand partners (either DSPs or direct advertisers), there could be an agency involved in there, and there might be a DMP as well — all those fish are swimming in the automated bowl trying to facilitate the ad buy. According to Hansz, there are two specific ways that the programmatic process as it currently exists fails. One kind of informs the other:
There are too many parties involved, and thus, wires get crossed, mistakes are made.
There’s a tremendous lack of trust. Hansz described a familiar refrain delivered to the supply side from marketers: “Well how do I know that the highest bid that actually came through is what you passed onto me? How do I know you’re not collecting more than your fair share of the transaction?”
Rivr, the AI-powered special project of Simplaex, which is still currently in beta testing with at least four different partners (whom Hansz declined to name) aims to eliminate the causes of that distrust.
“What Rivr does, is it actually uses AI to understand each party’s user classification — how they’re classifying those users,” he explained. “And then it basically acts like a universal translator [to] make sure that everyone’s comparing apples to apples and oranges to oranges. More importantly, it can also see which demand partner’s actually looking for a specific user, and can actually just show them the things that they want to see.”
Currently, an advertiser sends out their request to a hundred different demand partners, and if you’re lucky, as Hansz says, perhaps three will reply. That’s a lot of wasted spend in finding those suitable three.
“So, it not only acts as a translator so everyone can know who wants what — who can buy what,” Hansz said. “But it also helps save on operational costs, because you’re only sending the relevant impressions or the relevant opportunities to the people who want it.”
But how? Hansz said the data Rivr needs to work is the same data already available to SSPs.
“The programmatic ecosystem is developed to sell individual impressions in an automated fashion,” Hansz said. “The problem is, that is on what we’re calling a ‘traffic-level’ dimension. It’s saying, I have a banner … on the sports page of this website that we want to show, who wants to buy it? What’s different here is, we’re transforming the transaction from an ad format to an audience format.”
So, instead of the machines talking and saying, “Hey, I have this inventory on this particular website,” Rivr could, in theory, provide a much more granular impression. Say, for example, “Hey, I have this impression to offer: A 20-to-30-year-old female in the U.K. who loves competitive diving.”
Rivr is in the early stages, with an ambitious goal of expanding its partners and going commercial before the end of the year. There are multiple machine learning models for different datasets (age, gender, interests, engagement likelihood) that are all in automated communication with one another. Hansz said that its partners have seen five times higher clickthrough rates in beta testing, and the company is hoping that will carry them to commercial success in the coming months.
“The motivation for advances in ad tech has been to the benefit of one party, or to maximize the ROI for one party,” Hansz said. “What we’re doing is we’re not maximizing anyone’s ROI, what we’re maximizing is the efficiency of the deal flow.”
If that’s true, it’s hard to imagine why it wouldn’t be welcome.
A Rivr Runs Through the Exchange: Simplaex’s AI-Powered Identification Layer
“Why is everyone unhappy in this industry?” asks Jeff van Ede, CEO and Co-Founder of Simplaex. “There is something fundamentally wrong in this industry, and with my nature as a troubleshooter, I couldn’t let it go.”
Doesn’t it seem ridiculous that technology players like Facebook and Google are soaking up the majority of digital ad revenue? These companies are merely the gatekeepers to access data and users — well, access them at scale, which is where the real money is.
Because advertisers and publishers feel as if they’re forced into working with the Duopoly, they fling fingers of blame at each other (e.g., viewability, programmatic race to the bottom) and square off with increasingly ludicrous postures. Thus we remain in the era of sided platforms as Google, Facebook, and a little up-and-comer named Amazon gain more and more leverage over the larger digital advertising landscape.
“A lot of new technologies are developed to support either the advertiser or the publisher,” van Ede says. “Each is trying to outsmart the other side in getting a better deal. That might be good for either one individually, but the ecosystem suffers.”
Simplaex has an interesting solution — an AI-powered communication layer centrally located so it can assist publishers and advertisers better meet each other’s objectives, which VP of Strategy Benjamin Hansz was kind enough to detail for the crowd at Programmania during this year’s Ops. The beta rollout of Rivr (actually launched at Programmania) is greatly focused on SSPs, which are increasingly serving as exchanges or just preferred intermediaries.
The technology attempts to push bid infrastructure away from units to people-based marketing — evaluating bid streams on an audience level. By serving as an independent layer, River aims to classify users from the bidstream via bidding attributes from the buy side; profile attributes from the supply side based on data connected to bid requests; and user interaction gathered through monitoring.
Rivr theoretically allows the buy side, exchange, and sell side to exchange audience information through a secure channel. Van Ede explains that Simplaex does not store or enrich the data; it can be used a validation or verification tool by third parties. But the larger benefit will be using its AI Wallace to optimize recommendations to both buyers and sellers.
In effect, the company is proposing using this communication layer — or a “universal translator,” as Simplaex puts it — as a way to bypass IDs (including cookies). This could be a useful way to get around some of the pitfalls of GDPR, with the buy side able to rely more on the supply side data from publishers that have received consent.
It’s a fascinating employment of AI, one that could level the playing field for supply-side technology players that aren’t as well endowed when it comes to first-party data, but whom have solid technology and publisher partners with the data goods. Though it’s early days with Rivr now just launching in beta, the aim seems to be a solution that easily plugs into most technologies within the programmatic space.
Potentially, a tool like Rivr could sit side by side with other identifiers… Or such a communication or translation layer could actually replace the need for identifiers.
Rivr, the new AI-powered Audience Yield Manager that enables SSPs and publishers to advance to an audience-based performance model, today announced it will host a special roundtable event entitled “Supply Side Innovation: Is it the Missing Piece in the Digital Advertising Ecosystem?” Scheduled for Wednesday, June 6th from 8:30 a.m. to 10:00 a.m. ET in New York at ZAG S&W Law Firm, 1633 Broadway, New York, NY 10019. The roundtable will explore issues, trends and opportunities that are currently top-of-mind with the digital advertising and media industries, including:
Publisher alliances and why they haven’t delivered on their promise.
Consolidation in the industry, especially on the supply side e.g. Snap & Metamarkets, Rubicon & NToggle.
Blockchain being applied to digital advertising — a welcome degree of complexity that will add value or just hype.
If the complexity of technology should be applied to those areas where humans cannot perform — like in how RTB works in less than 200ms.
How to demonstrate value-add as opposed to being considered part of the “tech tax.”
What does the landscape between Publisher and Advertiser look like in 5 years?
If simplicity of technology should be used where humans need to interface with technology or rather at the intersection of manual and automation — like in set-up, execution, and reporting, among related topics and issues.
The roundtable, hosted by James Hercher, Reporter, AdExchanger, will feature several notable industry executives including:
Jeffry van Ede, CEO & Co-Founder, Simplaex
Romain Job, Chief Product Officer, Smart AdServer
Ahmed Karim, Yield Optimization Lead, Chegg
Jim Asip, Director, Programmatic Sales, Cox
Eric Zambrana, Global Head of Inventory and Yield Management, TripAdvisor
John Delvito, Yield & Ad Ops Manager Programmatic Specialist, Nasdaq
Charlene Chen, Account Director, Global Brands and Agency Teams, Sonobi
Yinon Horwitz, Global Data Strategy, StartApp
“There’s an enormous gap that divides the digital advertising industry. On one side, you have the ‘walled gardens’ and on the other side is everyone else. These walled gardens derive their power from being the sole system standing between demand and supply. This allows them to ‘speak’ the same language throughout the process from bid request to serving an impression. However, SSPs and publishers are in a unique position to act as a ‘translator’ to the fragmented ecosystem. By detecting the bidding patterns on the demand side, plus all the available data in the bid stream, allows them to shift to an audience-based advertising and fight back against the ‘walled gardens’!,” said van Ede. “We’re delighted to bring together some of the industry’s smartest and brightest minds to have an open dialogue to discuss the issues of the day, how to address the challenges digital advertisers face, and how we can find the best monetization tools.”
To attend this special roundtable breakfast, please register here.
Rivr is a new Audience Yield Manager, powered by Simplaex’s AI-backbone, that enables SSPs and publishers to progress to an audience-based performance model, delivering exponential value to both advertisers and publishers. Rivr is the first AI technology that will reduce waste and complexity, create a new kind of transparency and control to deliver ROI benefits across the full programmatic spectrum. For more information, visit http://biz251.inmotionhosting.com/~rivrai5/ or follow us on Twitter.
Simplaex Unveils AI-Powered Rivr To Help Advertisers Reach Audience
Simplaex, a company focused on using artificial intelligence to evaluate consumer habits and programmatic advertising, beta-launched its new Rivr.
Rivr is an AI-powered audience yield manager that provides an audience-based performance model to bridge the programmatic gap between advertisers and publishers.
Meant to tackle the increasingly complicated relationship between publishers and advertisers, Rivr offers a new level of precision by simplifying the supply chain.
“In our conversations with advertisers, publishers and SSPs, we heard a number of recurring themes, all related to the fragmentation of the programmatic supply chain. Rivr addresses these themes head on without adding another layer to the tech stack,” stated Jeffry van Ede, CEO-cofounder, Simplaex.
Rivr translates any changes to the bid stream on an audience level for publishers and SSPs. It also allows for dynamic pricing strategies that posits the value of an audience rather than demand. In turn, buyers can target specific audiences while sellers get the best pricing and rates.
The focus is on transparency for both sides of the advertising supply chain: real time adjustments are made through AI-powered programmatic interaction inside the bid stream.
According to Simplaex, the simplicity of the technology allows for optimized performance, as it uses actual supply and demand to unify audience classification and value, which it claims leads to an enhanced ROI for all parties.
Moti Tal, CTO-coFounder, Simplaex stated “Rivr’s AI can be plugged into any existing technology to offer SSPs and publishers the ability to better forecast and price audiences … so they can sell more without risking under-delivery or cannibalization.”
Rivr was tested with several SSPs across the U.S. and Europe before entering the beta-testing phase.