Countering header bidding, Google drops its ‘last look’ advantage

Google may have taken away header bidding’s best reason for being.

The increasingly popular practice of header bidding arose largely because publishers were unhappy that Google gave its own DoubleClick Ad Exchange (AdX) a “last look” on auctions for ad impressions. Only AdX was able to bid on every impression, and it could always outbid others.

But Google posted this week a new support document — first noted and confirmed with Google by AdExchanger — about an open beta phase for a new procedure that eliminates the “last look” practice.

Called Exchange Bidding in Dynamic Allocation (EDBA), it was first announced as a test in April of last year:

Exchange bidding in Dynamic Allocation will allow publishers to invite trusted third-party exchanges and SSPs to submit real-time prices using industry-standard RTB calls. These prices will be considered along with bids from the DoubleClick Ad Exchange and the publisher’s reservation campaigns to pick the highest-paying ad.

In other words, Google’s AdX doesn’t get a preferential bidding position where it can outbid the winning offer. EDBA currently only supports display ads, not video or native ads.

In the increasingly popular header bidding, a tag on a publisher’s web page does an end-run around Google by directly calling bids from exchanges and preventing AdX from getting a last bid. In its new document on Exchange Bidding, Google argues that Exchange Bidding works better than header bidding:

Exchange bidding versus header bidding

Exchange Bidding lets the DFP [Google’s DoubleClick for Publishers] ad server communicate directly with third-party ad exchanges in a server-to-server connection, rather than communicating through custom header bidding code implemented in a publisher’s mobile app or webpage. This direct method reduces page load latency and eliminates the complex publisher configuration required by header bidding. Eligible inventory trafficked in DFP can take advantage of Exchange Bidding with no additional technical development required for publishers.

Header bidding advocates like ad exchange AppNexus have contended that header bidding does not cause page latency (slower page loading), but Google has disagreed.

But, as pointed out by AdExchanger, EDBA could give Google an informational advantage over other bidders, since its ad server is also directly connected to the publisher’s server. For instance, it might be able to better understand than other ad bidders which page impressions are more valuable because of where they are in a website.

However, Google Director of Product Management Jonathan Bellack told AdExchanger that his company doesn’t intend to maintain such an advantage, although it’s not yet clear how the informational field will be leveled.