Google’s AdMob Bids Adieu To The Waterfall With Its Take On In-App Header Bidding

Google is testing header bidding – again. But this time it’s for in-app demand.

On Thursday, Google announced the kickoff of a beta test to blow up the waterfall mediation model within its mobile ad network, AdMob, and replace it with a unified auction.

“Think of it as [Google’s] Exchange Bidding, but for networks,” said Sissie Hsiao, VP of product for mobile app advertising at Google. “Everyone bids in and we call to the networks in real time.”

The option is already live within OpenX, Smaato and Index Exchange, while other networks, including AdColony and Vungle, are in the immediate pipeline.

Google’s announcement comes several months after MoPub, Twitter’s mobile ad exchange, said it is experimenting with advanced bidding to replace mediation.

Open bidding, as Google is calling its version of in-app header bidding, enables multiple ad networks to bid on the same inventory at the same time, as opposed to the legacy daisy-chain method in which bids are offered to networks sequentially based on historical CPMs.

In theory, developers position their best-performing networks at the top of their waterfall, where the best bids are usually found. But in practice, historical pricing “does leave money on the table,” Hsiao said.

“For every single impression there might be a lower-priority network further down the chain willing to pay more,” she said, but the “flawed setup means that demand doesn’t get a fair shake at making a bid.”

AdMob is well situated to coordinate the open auction. For one, it’s got an enormous SDK footprint. More than 80% of the most downloaded Android game developers monetize using AdMob, which means they don’t have to integrate multiple ad-network SDKs to participate in open bidding. Because apps don’t have a header, implementation would usually require a full SDK integration.

Using AdMob for open bidding would also allow developers to get their billing and reporting from the same place instead of toggling between platforms.

“Developers get the best price for inventory [and] networks get more, fair and ubiquitous access to see all impressions,” Hsiao said. “We’re taking monetization to a whole new level in AdMob.”

And the playing field really is level, she said. All networks compete on an equal footing, including Google.

“No priority is given to any ad source,” Hsiao said. “The winner is always the highest paying advertiser in a given moment.”

It’s a necessary point to make. Google has a history of advantaging its own media. In desktop, Google’s last-look advantage, which gave Google the chance to outbid the original winner of any auction, provoked the header bidding boom among ad tech vendors and forced Google to release its own header bidding tool last year.

So, it behooves AdMob to get in front of the in-app header bidding trend with an offering of its own, especially as a growing number of mobile ad tech vendors are doing the same. Fyber, ironSource, Smaato, PubMatic, OpenX, AppNext, Appodeal, HeyZap, AddApptr and, of course, MoPub, among others, are all chugging along with solutions.

There’s no extra charge to use open bidding in AdMob other than a small revenue share Google says will be offset by the revenue kick developers will get from networks competing in a more egalitarian auction.

Also on Thursday, Google said it’s launching two additional app-related betas over the next few months.

The first is for rewarded video ads for AdMob developers, with the rollout of playables and multiple-option video ads, which will allow users to choose which ad they want to watch in a given moment. The second is a beta for lookalike audiences to help developers find users with similar interests to their best customers.

Both the video and the similar-audience betas are available through Universal App Campaigns, Google’s app promotion product that uses machine learning to optimize ad serving across AdWords, the Play Store, search, YouTube, AdMob and the Google Display Network.

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