Introducing In-App Header Bidding

Post on June 12, 2018 by Mike Chowla

Mike Chowla Director of Product Management, Header Bidding

It’ll soon shake your windows. And rattle your walls.

For the times they are a-changin’.

— Bob Dylan, “The Times They Are A-Changin’”

Over the space of just a few years, programmatic advertising made a huge shift from the old inefficient waterfall to header bidding, improving yield for publishers and providing buyers with access to more impressions.  Mobile in-app advertising is starting the same transition away from the waterfall to header bidding.

The name “heading bidding” came from the mechanics of initiating parallel calls to demand partners from the web page header. Now, detractors will tell us that mobile apps do not have a header; therefore, header bidding is not possible in this environment.  However, header bidding has come to mean simultaneously soliciting bids from multiple demand partners ahead of the ad server call and that concept works just as well, if not better, on apps as it does on browsers.

The Problems with the Waterfall

The waterfall setup sequentially calls demand partners utilizing historic pricing data, creating an inefficient marketplace.  If the partner is called and its bid price beats the historical average of the partners lower down the stack, the impression is filled.

Waterfalls produce suboptimal yield for two reasons.  First, a partner further down the stack may be willing to monetize that impression at a higher CPM than a partner higher up on the waterfall, but never gets the opportunity.  Second, historical averages are just that—averages.  For any given impression, the partners lower down the stack may come in below their averages.

Having all partners simultaneously bid and then award the impression to the highest bidder allows the publisher to receive the highest possible value for a given impression.  Under waterfall setups, publishers expend too much effort trying to optimize the order of their waterfall to improve yield. However, even the best ordering will yield less than an auction based on real-time pricing data, where all bidders are considered.

Drawbacks of SDKs

Traditionally, for a mobile app publisher to work with a demand partner, the demand partner’s SDK had to be implemented in the app. Some SDKs have multiple drawbacks for app publishers. They can increase download size, which deters users from installing the application.  The SDK can also introduce stability risks. And if the SDK contains bugs, it can result in poor user experience.

Having to include an SDK also eliminates options for adding new demand sources to your installed base and experimenting with new sources. When adding an SDK is necessary for a new partner, publishers can only use that source after a given user has upgraded to a later version of the app which includes that SDK.

Adding an SDK consumes development team resources which means the monetization team has to create a business justification which creates a chicken and the egg problem. How can one be sure adding a partner is a good idea until one has trialed the partner?

Server-to-Server Heading Bidding To The Rescue

Server-to-server (S2S) header bidding solves the challenges facing mobile app monetization.  With S2S header bidding, the mediation of demand partners is moved to the cloud. Demand partners can be added or removed across an app’s entire installed base almost instantly. S2S header bidding requires a small piece of the client-side code inside the app, compared to a full SDK, reducing the application’s download size.

When choosing a mobile in-app S2S solution, monetization teams should consider how easy it is to add and remove partners and what level of analytics the solution provides. Being able to easily add and remove partners without needing to author a complicated configuration means that the monetization team can make the changes they need without requiring help from engineers. Robust analytics are crucial for understanding and tuning performance.

PubMatic’s In-App Header Bidding Solution

OpenWrap In-App provides both a user-friendly UI for managing demand partners as well as a rich set of analytics that enable teams to tune their monetization setup for best performance. Partners can glean the benefits of OpenWrap, for desktop, while continuing to further monetize mobile. To learn more, check out our community site for additional detail or contact us.