A trend is looming on the horizon in the programmatic advertising world, but it comes with a caveat: It's best for large publishers and media companies.
Header bidding wrappers are similar to older, less-sophisticated header bidding tags, which let publishers put ad impressions up for simultaneous bids by multiple groups of buyers instead of working their way through those groups sequentially and taking the first decent offer.
Wrappers help publishers add and manage potential buyers without slowing down load times, a negative side effect that basic header bidding has encountered. Adding exchange partners to multiple websites is also a massive and costly time sink. But wrappers aim to fix that, as adding different partners across multiple websites is far easier to do than previous methods; once implemented, they are easier to manage.
On Wednesday, Time Inc. became the first major publisher to announce it will use a header bidding wrapper. The company will apply the technology across its entire U.S. portfolio, which includes websites such as People, Sports Illustrated and Fortune, through a partnership with Index Exchange.
The company expects the move to increase revenue by 10% to 20% for impressions sold through the technology.
"Having a header wrapper solves the problem of putting dozens of advertising tags on the page because it is not only cumbersome for us to do, but it also slows down the page," said Andy Blau, chief business officer at Time Inc.
The wrapper will also give Time Inc.'s biggest advertisers the ability to buy the specific impressions they want, in real time, based on pre-negotiated rates and before those impressions go up for bid.
"We have some advertisers who want to be on the page virtually through the wrapper so they can buy the specific impressions they want before it goes to auction," Mr. Blau said. "Those advertisers have to be large, high-commitment-level advertisers in terms of their spend."
The move is significant as it also represents innovation from the publisher's side, something not often seen in the programmatic space.
"What this means is if you look at the continued growth of programmatic, marketers have been increasingly investing in audience, data and platforms," said Andrew Casale, president and CEO of Index Exchange. "And what Time Inc. is responding to is that the marketers continued investment in innovation on the buy side needs to be mirrored on the supply side as well."
Header bidding wrappers will appeal to bigger companies, according to Mr. Casale. "We view the wrapper as an enterprise product," he said. "If you contrast the expectations of a publisher of the caliber of Time Inc. and compared it to a mid-sized publisher, I don't think it is quite the same parallel."
As it stands right now, publishers and media companies who haven't adopted a header bidding strategy are behind the eight ball.
That's widely regarded as the consensus today, and it's heard in public and behind the scenes, as using header tags -- or now wrappers -- often translates to double-digit revenue gains on impressions sold by the publisher or media company. It also allows the sell side to loosen the grip held by Google and its DoubleClick platform.
Google's DoubleClick has dominated programmatic advertising, but both publishers and advertisers have clamored for more transparency, among other things. Header bidding's meteoric rise last year even prompted Google to offer its own solution, which is currently in early testing.
"Header bidding scares Google quite a bit," one industry executive said, who asked to remain anonymous to protect industry relationships. "But it's not like the Google regime will see a downfall, but the header bidding wrapper will likely result in a significant chink in their armor."
Another high-level executive, who also asked to remain anonymous, said publishers and media companies want to work with more than just Google.
"I think header bidding wrappers will signal to Google that media companies don't want to subscribe to having just one master," the person said. "Header bidding evolved because Google wasn't transparent enough. The DoubleClick for Publishers monopoly that Google acquired has really put them at the top of the mountain because everything starts at DoubleClick and then goes down."
"That gave Google a strong competitive advantage," the person added. "And that made some companies uncomfortable. What this does is media companies want to diversify. They want more transparency."
Turner, which has brands that include CNN, NBA.com and Bleacher Report, intends to roll out a header bidding wrapper to its portfolio, according to a person familar with the plan.
A Turner spokesman said only that the company is "currently evaluating adoption of header wrappers."
AOL, meanwhile, is also working on deploying its own header bidding wrapper across other large publishers' sites, a spokesman said, declining to identify the outlets.
"We have seen significant growth and traction around our header bidding solution and numerous ComScore top 100 publishers are utilizing our tools to achieve a new level of holistic yield management," said Tim Mahlman, president of AOL platforms.