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Exchange-based allocation takes centre stage in SA

Exchange-based dynamic allocation (EBDA) is Google's brand-new solution to all the issues around header bidding. This new product means that regardless of what platform the bid comes from, it is awarded solely based on price, which is a game changer for publishers. This product has been highly anticipated in the international market, and we have been working with Google for a while to test and launch this in sub-Saharan Africa. This solution is a server to server integration, so nothing gets done in the website source code or on the website - all the heavy lifting gets done by the technology companies and clients can plug in index exchange.
Jeremy Abbott
Jeremy Abbott
So why EBDA?

There are a number of significant advantages to EBDA, which is why we’re so excited to be the first African publisher to go to market with this product. Firstly, there is no impact on the page load times as there is with header bidding. So not only is more inventory being made available to them programmatically, across a greater variety of channels or exchanges, there is also absolutely no impact on page load time. This is particularly important to buyers who are looking to reach specific users or audiences rather than simply buying impressions – as milliseconds in load speed would mean the difference between reaching your audience and meeting your KPIs, or not.

Another advantage is that while publishers do need to develop relationships with their chosen partners and negotiate price floors and rules of engagement in each partner, there are no major development resources required, and their ad ops team is also not required to traffic and manage the several hundred line items required for a header bidder solution.

And of course, the main advantage is that the ad exchanges and Sell-Side Platforms (SSPs) will now have an equal opportunity to win bids, based on price and not platform, for the first time.

What is header bidding?

A few years ago, international markets introduced new technology, header bidding, in an effort to level the playing field between SSPs and ad exchanges. This was essentially a ‘hack’ to rectify the inefficiencies caused by the traditional waterfall model used by publishers. In this model, the ad exchange was always sent the impression first, even if the SSP had placed a higher bid on the impression. Header bidding mitigated this, as all the partner SSPs would be able to send their bids for each impression alongside the ad exchange bid, so that they would be competing on an equal footing.

Header bidding is essentially an industry solution that does the job, but is not a perfect solution. Unfortunately, with the auction occurring in the page head, there are inevitably latency issues. The more partners that were placed in the head, the greater the impact could have on page load times, which could lead to alienating users through poor user experience, as well as a negative impact on the buyer’s campaign performance. This could lead the buyers to bid less on the publishers’ inventory in future or even blacklisting them and excluding them from future campaigns.

In fact, when we tested our own header bidding solution at The SpaceStation, we found that it significantly delayed page load times with only three partners in the head. Creating a workable header bidding solution means that you require dedicated developer resource to make changes to the site code as well as a very complicated setup in the ad server – so it requires a significant time investment from both a developer and ad operations perspective.

What this means for the local market

EBDA is a huge step forward and a highly-anticipated product, both locally and internationally. EBDA makes a lot more sense for the local market right now than header bidding does, as it removes the requirements of extensive developer and ad operations resources, while delivering all the benefits to both buyer and seller.

It’s likely that many publishers will use a hybrid model in the future, where they have a few partners competing in the head and the rest plugging into EBDA through server integration. This will most likely lead to experimentation with different partners to see which one would fill which position.

While some publishers in the US and Europe are reporting double digit programmatic revenue growth due to header bidding, those markets are a lot more mature than the current South African market. Digital spend in those markets is sometimes over half of total marketing spend, so there is a lot more demand and competition for good quality, transparent programmatic inventory, which in turn drives competition and price. These publishers have also spent more than a year fine-tuning their header bidding solutions which represents a significant investment of developer and ad operations resources.

By implementing the EBDA solution we are leapfrogging over header bidding and implementing a faster solution that allows bid price to be the only determining factor for an advertiser. Whilst we are currently Alpha testing this with Google, we are excited to be able to be the first local publisher in sub-Saharan Africa that will be able to roll this out to all buyers over the next year or so.

30 Jun 2017 11:56


About the author

With over 16 years of experience in the digital advertising industry, Jeremy Abbott is the programmatic technology lead at The SpaceStation. Jeremy specialises in publisher ad operations, ad exchanges, yield optimisation, vendor selection and technology research and implementation.

Jeremy is responsible for developing and implementing strategies to optimise the yield of publishers' inventory channels at The SpaceStation through reviewing, evaluating and implementing sell-side technology stacks and solutions. Jeremy is also responsible for training brands and agencies in buying inventory across The SpaceStation's programmatic division, SouthernX, as well as analysing and interpreting data to make optimisations to sell side configurations.