AppNexus And Index Exchange Launch Server-Side Header Bidding With Mutual Support

serverside-hbPublishers contemplating a switch to server-side header bidding now have two more options. They can use AppNexus’ Prebid server-side wrapper, which will tap into Index Exchange’s demand. Or they can put Index Exchange’s wrapper on their page, which will make a server-side call out to AppNexus.

“We are giving publishers choice, and a flexible, transparent solution,” said Tom Shields, SVP of publisher strategy at AppNexus.

The deal solves a major problem with server-side solutions: gaining support from other supply-side platforms (SSPs). Technologically, making server-to-server connections isn’t difficult. But getting the handshakes from fellow ad tech partners to support server-side deals has been tough.

When OpenX launched a server-side solution over a year ago, no ad tech firms supported it, which made implementing it pointless.

“A year ago, there wasn’t as much collaboration between the exchanges and wrappers. That’s changed,” said Drew Bradstock, SVP of product at Index Exchange. “Publishers are demanding it, and exchanges are getting on board because they realize that for some inventory, it’s server-to-server [integration] or they’re out.”

In order to make the auction fair to everyone, AppNexus and Index Exchange will offer log-level data to each other as well as to the other partners participating in server-side header bidding. With that data, both publishers and exchange partners can see the bids. AppNexus and Index Exchange will be able to identify each other as bidders, but other partners would be anonymized for privacy reasons, Bradstock said.

AppNexus and Index Exchange will also let their server-side partners maintain contracts with publishers and pay them directly. In contrast, Google’s server-side exchange bidding solution requires all payments go through them.

The exchanges will also disclose the auction’s rules. Index Exchange will collect all the clearing prices from the exchanges and then let the highest price win.

AppNexus is slightly different and will run the auction after exchanges submit their first and second prices. “Our server-to-server buying partners have a much better chance of winning the auctions that matter to them,” Shields said.

Publishers who have already chosen an Index Exchange wrapper or AppNexus’ Prebid face a relatively easy integration – Bradstock described it as a button click – and neither Index Exchange nor AppNexus will charge publishers to use the service, except when they win the auction. Bradstock said Index Exchange can afford to do this thanks to last year’s infrastructure investments.

Publishers should expect faster ad calls when they go server-side. Bradstock predicts that publishers “will get down to sub-200-millisecond timeouts” with server-side header bidding.

Shields predicts server-side header bidding will attract publishers who avoided early incarnations of header bidding because they didn’t want to negatively impact the user experience. The market dynamics that header bidding unleashed – causing Google to revamp its ad server and Rubicon Project’s stock to tumble downward – remain in place.

“The fundamental shift is from the waterfall to people competing at the top,” Shields said. “[Server-side header bidding] is just accelerating the shift from the waterfall, and there will continue to be shakeouts from that shift.”

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