March 22, 2017
Facebook Launches Header Bidding, Turns To Partners For the Tech
by Allison Schiff //
Facebook is taking the wraps off its header bidding solution, but it’s relying on partners to build the technology.
On Wednesday, Facebook officially tossed its hat into the header bidding ring after a lengthy beta period by opening Audience Network as a demand source for mobile web publishers that work with a short list of pre-approved tech platform partners, including Amazon Publisher Services, Index Exchange, Media.net, Sonobi, Sortable and AppNexus.
In other words, Facebook doesn’t have standalone header bidding product. Rather, publishers working with one of Facebook’s partners can flip a switch for access to Audience Network demand through their existing wrapper integration.
Depending on the technology partner, access comes through code loaded on to the page, and Audience Network demand flows directly onto a publisher’s own property. Facebook is also exploring server-side integration. All formats will be available, including native, video and standard display.
Facebook’s approach is different from the road Amazon is hoeing with its own server-side header tag, which publishers can use to manage all of their header partners within a single wrapper.
But there was no reason to redesign the wheel, said David Jakubowski, Facebook’s director of publisher solutions. Facebook is happy to get a piggyback ride.
“We’re not coming out and trying to compete in the ad tech landscape or releasing third-party technology,” said Jakubowski, who noted that Facebook was happy to wait in the wings while the industry matured and shook itself out.
Facebook first confirmed that it was beta testing header bidding back in August with a small group of publishers, including The Washington Post, Forbes and Daily Mail.
This is the first time Facebook is allowing Audience Network demand to go anywhere other than through a direct implementation, Jakubowski said, but the time is ripe.
“All the demand sources need to get the same information at the same time,” he said. “And the ad space should go to the person who needs it most without any weird black-box arbitrage or bias to any owned and operated demand source.”
Facebook, however, doesn’t have the best track record of following through on its ad tech overtures, as evidenced by the staccato dismantling of its stack over the last year, from the shutdowns of video SSP LiveRail and its ad exchange FBX to its stillborn plan to build a demand-side platform for Atlas.
In November, Facebook scrapped the ad server portion of Atlas, which lives on as a cross-device measurement pixel.
Facebook’s foray into header bidding is more about trying to build stronger ties with publisher partners rather than an open ecosystem play.
“This is a departure from ad tech of the past,” Jakubowski said. “It’s a simplification and cleaning up of the technology process so that everyone knows where their dollars are going.”
Jakubowski declined to share Facebook’s match rate with publishers accessing Audience Network demand through its header bidding integrations other than to say that “it happens frequently.”
“Quality publishers are more likely to have real people,” he said. “But if you’re doing weird things to manufacture traffic and hide inside the black box of open auction processes, that’s not going to do very well with this methodology.”
According to Drew Bradstock, Index’s SVP of product, Facebook is generally able to find the users advertisers want to bid on thanks to the scale of its user base, and that doesn’t change much between different environments, whether that’s the mobile web, apps or desktop.
“App demand is an area where Facebook has been quite strong due to their user graph,” Bradstock said. “With the inefficiencies of today’s dated app mediation offerings, this makes the real-time demand of having Facebook compete with exchanges even more attractive to publishers.”
Facebook claims that publishers see somewhere between 10% and 30% in additional revenue when they integrate Audience Network header bidding.
But that sweet revenue nectar shouldn’t blind publishers to the dangers of turning to Facebook for yet another thing, wrote Sizmek’s GM of programmatic, Mike Caprio, in a recent AdExchanger column.
“Continued reliance on Facebook as a platform is a double-edge sword,” Caprio said. “Today it means protection against the sharks circling in the ecosystem, but in the long run it can mean disintermediation and commoditization of content.”
But Jakubowski argues it will give publishers more control.
“They’ll have more visibility into the pricing and the dynamics of what’s happening on their properties,” he said. “And advertisers will end up with more media they actually want.”