Prebid or Post-bid, What’s the Big Whup?
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So there I was…

Just when you think you got a handle on things, WHAMO!, life throws you a curveball. Isn’t that usually the case?

So I’m sitting there in a meeting just over a year ago, following the conversation about a publisher’s ad tech stack. They get around to talking about how header bidding has helped them gain more ground against Google and a bit of leverage with their SSP partners. Which is all par for the course, and then comes the curveball. My colleague then asks, “Is that prebid or post-bid?”

(needle scratch)

I stepped in and said something of little or no value that clearly demonstrated I had no idea what was going on, like “Well, it’s got to be one or the other, amiright?!?!?”

(the room went quiet)

Thus, I decided to find out a bit more about header bidding and what the crap “post-bid” was. I thought I’d share that journey with you as well, in case you haven’t gone down that path yet. Where to begin?

 

Start with the basics

First off, it’s good to note that header bidding was created as a hack to empower publishers. As numerous companies created their own proprietary tech to institutionalize this hack, it became apparent that industry standards would be a good thing. AppNexus then decided to make its version open source and created Prebid.org towards the end of 2017. From there, things really began to take off.

 

Following instructions

In its original guise, as the page loaded and the code in the header was read, it would trigger the header bidding set up to call out to a handful of demand partners with a programmatic auction. The return from that would set the bar for what the ad server (usually DFP) would have to beat. If the ad server… well, let’s be honest and just call it DFP, shall we? If DFP could beat the price, then the ad server would continue on per usual. However, if it couldn’t beat the header bidding auction, then the winner from the header bidding auction would then get its add in the limelight.

Quick side note, to distinguish between the organization (Prebid.org) and the act of a header bidding auction occurring before the ad server is called (prebid), they’ll be written with the capital letter + .org and lowercase letter respectively.

While there are many benefits to a header bidding set up, the main one is that it allows a publisher to see what’s out there in the market place and demand the most of its adserver. What’s more, it allows the publisher to function as the true broker of its inventory. #empowerment

Here’s the rub though, the conceptual benefits were much higher than the actual benefits. The result in such a bidding mechanics is that the party that bids first is at a disadvantage. Put another way, it’s easy work for the last party to evaluate the price that needs to be topped, and simply add one cent if they want to win the auction. So one could imagine in theory, DFP see the first moves in the auction, say “that’s cute” and simply add one cent to win the auction – continuing to take all of the wins it wanted.

 

Now add a twist

Not overly pleased with the actual results of the prebid auction, the idea came about to switch things up a bit and make the adserver go first. The change was subtle but very effective. By calling DFP first and then conducting the header bidding auction, the onus was now on DFP to do it’s best, allowing the rest of the market to snap up the auction by just adding a penny should they so choose.

In case it wasn’t clear, this is how the name “post-bid” came about – in that the header bidding auction is done after the adserver is called. One last tick in the “Pro” column is that setting up header bidding in a postbid fashion is much more straightforward and simple.

 

What’s the punchline?

What it all boils down to is that header bidding has proven a boon for publishers, especially the more that it gets standardized and formalized.

There is now the choice to either build or buy your header bidding solution as well. Some publishers we’ve spoken with have decided to take an open source version of header bidding like Prebid or PubFood and tailor it for themselves. Alternatively, you could go to most major exchanges, like Rubicon Project, and they’d have a managed header bidding service you can buy. In our experience, having had discussions with over fifty different publishers, Prebid.org seems to be the de facto industry standard.

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