Facebook’s recent announcement on the integration of header bidding into its Audience Network is noticeably missing a key consideration.
Although the social giant has pulled out all the whistles and bells during the launch of its own header bidding solution, it’s gone completely silent on how it intends to solve the complex intricacies of video-specific header bidding.
So while the industry is either applauding or fearing Facebook’s latest move, the criteria for its header bidding partners is worrying.
When asked about the conditions for their choice of header bidding partners, Facebook’s ad-tech whiz, David Jakubowski narrowed it down to four principles:
- All demand sources get the same information at the same time
- The ad space goes to the source willing to pay the most
- There is no arbitrage, no “averaged” waterfall and no secret auction manipulations by a demand source
- A diversification and stability of revenue for publishers
At first it seems to make sense: waterfall, arbitrage and manipulations are all killed off and revenue gains of 10 to 30 percent are promised to publishers based on tests conducted by Facebook.
While this might seem like a perfect solution for publishers eager to gain access to Facebook’s advertising might, in reality Facebook’s approach is seriously flawed, particularly Jakubowski’s point on giving ad space to the highest bidder.
According to Dvir Doron, CMO of Cedato, while header bidding based on price can work in display, the process falls short in video header bidding. During a video transaction any technology that optimizes exclusively on price will fail to address vital validation issues. The inevitable outcome is relatively low yield that will fail to reach the revenue projections postulated by Facebook.