Google has quietly removed what’s referred to as its “last-look” advantage in real-time auctions. In news first reported by AdExchanger, Google tweaked the auction so that it doesn’t give itself the advantage of a last look in allocating bids. Essentially, this means Google will identify the price each exchange will pay, including its own exchange, AdX, and place it in a single auction where the highest price wins.
The ad-tech industry, to date, has found header bidding a suitable tactic for working around the tech giant. Most ad-tech firms now offer it or are partnering with others on it. But since the obstacle that spurred header bidding on is no longer there, why does the industry need it? And, since so many ad-tech firms have gone all in on it and if the playing field is more level, what should they do?
Stephanie Snow, vice president of ad operations, Intermarkets, told RTBlog: “Google’s abandonment of ‘last look’ could be a move toward a first-price auction, where inventory is bid on according to its actual value as perceived by the buyer. If Google moves this direction faster than other header bidders, it would regain the advantage they gave up.”
Noam Neumann, VP of mobile strategy, Matomy Media, doesn’t believe header bidding will go away immediately, but that ad tech companies will need to identify different value propositions for publishers, especially now that Google has changed course and both it and Facebook have similar offerings.
“Header bidding won’t become obsolete tomorrow, but Google’s recent announcement will shift the industry drastically and force header-bidding-focused businesses to rethink their strategies,” Neumann told RTBlog via email. “Header bidding once provided companies with a competitive advantage—the ability to offer more transparency and control. Now that Google has removed its ‘last-look’ advantage, there will be a different value play for publishers and advertisers seeking better data, rather than more transparency, which will provide them higher ROIs and yield. …But the main difference is the type and price of demand, so the game has shifted from transparency to the quality and ability of data provided.”
The Trade Desk’s Tim Sims, Vice President of Inventory Partnerships, called header bidding “the first step toward the preferred end state of programmatic advertising: a fully transparent marketplace where buyers have access to all classes of supply, sellers are able to maximize yield, and everyone gets to truly compete for each impression.” In that line of thinking, header bidding represents a step forward. Sims added: “Though it offers publishers the most immediate benefits, buyers have a major stake in the long-term success of a unified auction.” Sims said the company is always looking for more ways to move the industry toward a “truly open exchange market” and header bidding has enabled more transparency for all players.
Still, Google’s change, coupled with Facebook’s header bidding entry, suggests that ad-tech players should focus on improving overall technology instead of only one tactic.