Facebook is moving in on one of the largest trends in advertising tech in an attempt to rise in the ranks of the online display ad market. Google has historically been a giant in this market, but as Facebook seeks to expand its Audience Network, they are looking for new ways to become more competitive against the search engine force known as Google. Facebook is hoping to sell more ads, and expand its client base to a wider range beyond the game and utility apps that comprise the majority of its clientele. Facebook hopes to achieve this by introducing the use of header bidding with the Facebook Audience Network, and this of course, has put Google on the defensive as their position as a leader in online advertising is being threatened.
How Does Header Bidding Work?
Header bidding is a more recent type of advertising tech that is intended to help online publishers increase the monetary yield of their advertising inventory. In simpler terms, this means that header bidding is a method of programming that helps online publishers get more money for the same amount of advertising space that they have available. The advertising tech makes it possible for publishers to inject code into their page headers, which makes the advertising space available to multiple potential clients at once. The demand sources then have the opportunity to place bids on the ad space, and once the highest bid has been chosen, it is sent to the primary ad server and the selected advertisement is displayed across the header banner. This is a very effective method of maximizing revenue from header advertising spaces, and will allow Facebook and other publishers to drive up their ad rates through organic competition.
Header Bidding is a Challenge to Google’s DoubleClick
Although the introduction of header bidding is in the early stages of integration with Facebook and its Audience Network, it presents a significant challenge to the monopoly of Google DoubleClick. Prior to header bidding, the majority of online publishers worked with a tool known as “Dynamic Allocation” within the DoubleClick framework. Employing this tool allowed AdX, Google’s ad exchange, to compete with a publisher’s in-house sales department in an attempt to drive up ad rates. The problem with this process is that ad tech companies need to wait until AdX takes a look-in before anyone can vie for the ad space. This hurts their odds of coming out victorious in the auction in the very short time that it takes for a user to load a web page and the desired ad space.
Header bidding is the ad tech company response to this delay, and it has become widely popular among many publishers. It has become so popular that Google has become concerned about the diminished reliance of publishers on Google DoubleClick. In a defensive move against header bidding, Google announced in April that it was testing a new product known as Exchange Bidding in Dynamic Allocation. This is intended to allow third-party ad exchanges to contend with AdX within the Dynamic Allocation framework, and is widely seen as Google’s response to header bidding.