Header Bidding for Video: Everything Publishers Need to Know

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Below is a sneak peek at our new white paper on header bidding for video. Click here to download the whole thing!

Header bidding has been one of the most talked-about tools in ad tech for the last two years. Everywhere you turn, it seems like someone is talking about how header bidding is revolutionizing programmatic advertising.

But just about anyone who’s used it will tell you that header bidding lives up to the hype.

Let’s start with a quick refresher on what header bidding actually does. With a snippet of Javascript, header bidding allows publishers to auction each ad impression to multiple demand partners at once, rather than going through the waterfall process and showing them to one demand partner at a time. Header bidding creates a more open auction, allowing direct and programmatic demand to compete against each other so that publishers can get the true, market value of each impression.

Publishers saw results soon after header bidding’s arrival in 2015. Digiday reported that early adopters saw their CPMs rise by as much as 50%. Publishers have also reported other benefits such as increased yield, lower latency, and fewer passbacks since switching from a waterfall setup to header bidding. We’ve also seen those results firsthand with our publisher clients at AppNexus. Livingly Media, for example, achieved a 10% incremental revenue lift with header bidding and saw more than half of its ad calls get responses in under 500 milliseconds.

But so far, most publishers are only using header bidding for display inventory. In a way, that makes sense – many are probably hesitant to try out an experimental new tool on unique, higher-value types of inventory. But it also means they’re missing out on a huge opportunity: header bidding for video.

 

The Video Opportunity

 

Video is one of the fastest-growing channels on the Internet, with eMarketer reporting that the average U.S. adult now watches one hour and seven minutes of digital video a day, compared to 46 minutes in 2013.

With consumption on the rise, it should come as no surprise that digital video ad spend is rising annually, growing 39% from $7.68 billion in 2015 to $10.7 billion in 2016. Analysts believe that number could be over $15 billion by 2018.

Thanks to this growth and for its proven engagement with users, video now fetches the highest CPMs of any digital ad format. While programmatic display ads get $0.50 to $1.50 on average, programmatic CPMs for instream videos on desktop range from $5 to $15+ on average. For instance, check out the graph below to see how three video formats are blowing display out of the water across a common SSP.

Video ads are already incredibly lucrative for publishers, but they can accelerate that inventory yield potential by implementing header bidding for their video inventory.

The math is pretty simple. With header bidding, those $11.50 video CPMs could jump to $17.25, assuming the 50% bump publishers have gotten using header bidding for display. We’ve seen many of our clients achieve even more, with some video CPMs even breaking the $50 mark.

So why aren’t video publishers doing this already? It could be because it feels overly complex – there are more moving parts when it comes to serving video ads versus display. There are also misconceptions around header bidding for video. For instance, many publishers take it as a given that header bidding is sure to add latency for videos, when in reality it does the exact opposite under the right setup.

That’s why we wrote this guide. We want to address this confusion, show publishers what header bidding can do for their video inventory, and tell them how to get started.

The benefits go well beyond more money for publishers. Header bidding adoption can fuel the continued growth and improvement of online video, which improves the internet for advertisers and end users as well.

 

Click here to get the rest of the white paper and learn everything you need to know to get started with header bidding for video. 

Filed under AppNexus Updates, Industry Perspectives, Uncategorized.

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