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How the Ad Tech Industry Is Challenging Google Dominance

Google is the undisputed top dog of Internet ads. It thwarted its competitors when it acquired the DoubleClick for Publishers (DFP) product that is the mainstay of website publishers who focus on direct, in-house sales. But as with any monopoly-like victory in a given field – it never lasts for very long. As Ari Paparo writes in an article for Business Insider, the indirect ad market has been making greater use of a technical workaround called “header bidding” that gives it an imperceptible but effective advantage.

Indirectly Direct Sales

Revenue from direct ad sales is traditionally higher than from indirect sources such as networks or exchanges. In spite of that, yes, Google has purchase in the indirect market too, where it uses a tool called AdX. This works especially well because AdX is tightly tied to the DFP used in direct website ads.

Renewed interest in header bidding is how the competition is combating Google. This is where it gets a bit technical, but basically header bidding is like letting a broker from the New York Stock Exchange into a car auction. The AdX advantage is based on the fact that DFP allows it to utilize direct salesforce adds for bids. But header bidding preempts DFP, and allows aforementioned third parties like Amazon to find the best ads first:

In roughly 200 milliseconds, the header tag determines a price, then uses Javascript to pass the auction price into DFP to compete with all the ads the salesforce may have sold, as well as the AdX price. It’s a bit of a hacky workaround, but it works, and publishers will do anything that produces more pennies on each view of their page.

The technique increases publisher yield because, although direct ad sales typically yield higher revenue, one high profile visitor that accidentally wanders onto a website is going to require the indirect approach, and hence header bidding.

Read the original article at: http://www.businessinsider.com/how-ad-tech-companies-are-using-header-bidding-to-tackle-googles-dominance-2015-9

About Eric Anderson

Eric Anderson is a staff writer for CAI's Accelerating IT Success. He is an intern at Computer Aid Inc., pursuing his master's degree in communications at Penn State University.

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