Programmatic Trend Yields Big Gains for Publishers

Header Tags Open Inventory for More Bidders at Once

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Header tags are a term most people have likely never heard of, but they're one of the biggest trends to come out of the programmatic space in 2015.

That's according to billions of ad impressions worth of data pulled from the programmatic marketplace Index Exchange.

But what exactly are they?

Publishers use header tags to upend the usual order of business in programmatic ad sales. Without them, a web page that's loading places a call to ad exchanges to basically say its ad inventory is now up for auction, and the auction is open to a succession of demand-side platforms, marketers and agencies, one after the other. If one bucket of buyers doesn't bite, that same inventory is placed in front of a likely less lucrative group, in what's known as a waterfall.

When publishers do use header tags, everyone bids at once.

"They all compete side-by-side, in real time, against each other for that inventory on that page for that impression," said Lizzie Komar, director of research at Index Exchange. "What that does is unify all of the demand. This enables buyers to truly compete for inventory and pay the fair price for very specific impressions."

Header tags involve some work and some trust between publishers and an exchange, Ms. Komar said. "It requires a publisher to put a script on its actual page and when a script lives on the actual page, the publisher is in bed with an exchange. And once you're in, it is difficult to get out. It's more of an organizational burden to the publisher."

"We had one client running header tags last year and that in itself was ahead of the curve," Ms. Komar added. "Header tag auctions are really a 2015 innovation."

In 2015, the number of publishers using header tagging grew 68% between the first quarter and the second, according to Index Exchange data.

For publishers, header tags turn out to mean more revenue. Header tag ad rates outperform waterfall ad rates by 166% in open exchanges and by 46% in private exchanges, according to Index Exchange data.

"This has resulted in a significant rise in overall publisher revenue," Ms. Komar said. "As competition swells and buyers have more opportunities to reach and buy their high value audience targets."

Brands flock to private marketplaces
Ms. Komar's responsibilities at Index Exchange include making sense of the billions of data points the programmatic platform receives.

Another interesting observation for 2015: Brands are moving more ad dollars toward private marketplaces in an effort to avoid ad fraud.

While the private marketplace isn't immune, fraud appears more likely in the wide-open platforms where all kinds of companies can do business at once. The industry loses $5.3 billion annually from malvertising and non-human traffic, according to data provided Tuesday by the Interactive Advertising Bureau.

Right now, the biggest spenders in private marketplaces run by Index Exchange are Unilever, General Motor, Kellogg's, Allstate, SC Johnson & Sons and Domino's, in that order, Ms. Komar said.

Private marketplace spending within Index Exchange in the second quarter rose 204% from the quarter a year earlier. The number of private marketplace impressions transacted within Index Exchange increased 85%, according to Ms. Komar.

And while the private marketplace can help thwart ad fraud, doing business in the space can also cost buyers significantly more, Ms. Komar said.

Typically, winning bids in the private marketplace are higher than those in the open marketplace, about $10 for a thousand impressions versus about $3, Index Exchange said, as brands pay more for better inventory and more confidence that they are reaching real consumers.

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