Why Open Source Technology? Why Now?

Post on January 8, 2018 by Mike Chowla

Mike Chowla
Director of Product Management, Header Bidding

Header bidding has seen rapid growth across display advertising on the web. Publishers are now looking to gain the benefits of header bidding, namely increased yield, across additional advertising channels. As publishers consider what technology to use for header bidding, they must also decide between an open source or proprietary wrapper.

While proprietary wrappers have their place, open source wrappers have distinct advantages for publishers which should be considered when choosing wrapper technology.

Wider Choice of Partners

Integrating an SSP partner into a wrapper takes significant resources from the wrapper provider. Even the best resourced vendors have limited bandwidth and thus can only integrate a limited set of partners. Additionally, due to transparency concerns and increased support needed for an integration with a proprietary wrapper, many SSPs won’t participate.

Having fewer SSP partners available to work within a wrapper also reduces monetization opportunities for the publisher. This is especially critical for omni-channel publishers which need to ensure they can access partners with unique demand for in-app, video, native, and other emerging channels.

Due to the accessible nature of open source, a wider choice of partners is typically available.  Prebid.js version 0.34, for example, has 108 SSP adapters available which dwarfs the 12 to 15 adapters typically available in proprietary wrappers.

Higher Yield From Better Performing Adapters

For SSPs, getting their adapter to optimal performance in a header bidding wrapper is challenging. Getting the correct key-values to the ad server, handling deal IDs for PMPs, and user-syncing all have nuances specific to the wrapper being used.

The challenge of getting each piece operating correctly and fine-tuned is much more difficult in proprietary closed-source wrappers. The impact of an underperforming adaptor is felt by publishers as they are deprived of higher yield for their audience. With open source wrappers, each SSP can understand exactly how the wrapper works, study its code and receive advice and shared best practices from the community of hundreds of developers supporting the project.

The open source advantages result in improved performance and better yield. Having participated in both open source and proprietary wrappers, we at PubMatic have seen that monetization issues are typically solved much faster with open source wrappers.

Transparency

With open source wrappers, all participants can have confidence the auction is fair and unbiased. Publishers can trust they are receiving the highest yield since no demand sources are favored. SSPs are on equal footing with one another. Access to the source code means every party can see and understand the finest details of auction dynamics and bid handling. There’s no mystery or doubt as to how an auction is conducted. Here is a sample of our auction logic below:

With a proprietary wrapper, only the wrapper vendor really knows how it works. Even with the best intentions, small details can impact an auction. Open source means there are many eyes reviewing the code who can point out issues causing auction-bias and decreased publisher yield.

Future Proof

Header bidding is still in its early days. We can expect the technology to continue to evolve.  However, with proprietary solutions, publishers are captive to a vendor’s roadmap. Open source, on the other hand, evolves to meet the needs of the industry. New features are developed as the community needs them and contributes to their development.

Future proofing is particularly important as the types of inventory used for header bidding expands. In the U.S., header bidding is estimated to have reached over 70 percent penetration with web display. Video (both web and in-app), in-app display and native are all emerging areas for header bidding.

None of the proprietary wrappers available today have offerings in all of these emerging areas.  Vendors with proprietary wrappers will have to pick and choose which channels to focus on.   Open source projects with a broad support, such as Prebid.js, and the enterprise grade wrappers built on top of them will provide compelling offerings across a wide variety of channels.

Vendor Solutions On Top Of Open Source

Open source projects have many advantages but there are areas for improvement.

Enterprise features such ease of use, manageability, analytics and technical support are often lacking in open source projects. In most instances, enterprise editions using an open source core fill this gap. This approach has been successful is other areas such as big data processing and we expect it to work in ad tech, as well.

We are seeing an emergence of enterprise solutions for header bidding based on the Prebid open source project. PubMatic’s OpenWrap solution provides a transparent enterprise wrapper solution for Prebid. This approach enables publishers to deploy faster, and provides powerful UI based management tools and centralized analytics to optimize their yield.

By choosing an open source wrapper, publishers will have the widest choice of partners, ensure transparency and be ready to expand header bidding to additional channels.

What to look for in an open source wrapper?

If you are interested in learning more about what to look for in an open source wrapper, check out our recent blog series and solutions. Let us know how we can partner with you and increase your demand in the new year.