The Ultimate Guide To Open Bidding For Publishers

The idea of generating better revenue through unified auctions and providing demand partners with a fair chance of winning, helped publishers to become the de-facto programmatic technique to sell ad impressions. This same approach was subsequently incorporated within Ad Manager via Open Bidding (formerly known as Exchange Bidding in Dynamic Allocation (EBDA)).

So, what is Open Bidding, and should you try it? Although open bidding has been here for a while, questions around Open Bidding still bugs many publishers. In this post, we’re going to take a look at everything about Open Bidding and some ways that you can use it to maximize performance.

Table of Contents

• What is Open Bidding?
• How does Open Bidding work?
• Benefits of Open Bidding
• How to set up Open Bidding?
• Is Open Bidding compatible with the Multiple Customer Management Program?
• The caveats of Open Bidding
• Open Bidding Vs. Header Bidding: Which one is better?
• Can you run Open Bidding with Header Bidding?
• What’s next?

What is Open Bidding?

Open Bidding is Google’s server-side header bidding solution that allows multiple demand partners (e.g. Google’s Authorized Buyers as well as third-party ad exchanges, SSPs, and ad networks) to compete in a unified auction.

Unlike traditional waterfall that prioritized the demand partners based on historical averages and called them one at a time, Open Bidding enables you to run a unified auction which forces all demand partners (including Google) to compete simultaneously.

By running auctions in parallel, Open Bidding ensures that the highest bidder wins every impression. This leads to a better allocation of ad dollars––more fills and higher publisher revenue––with fewer chances for low ad fill rate or eCPMs.

How does Open Bidding work?

Now that you know what Google’s Open Bidding is, let’s look at the Open bidding process and how the auction actually goes down:

1. A user visits your website. The first step is to send the ad request to Google Ad Manager via Google Publisher Tags (GPT). Each ad request contains information about the user, device, and targeting.
2. Ad Manager selects the best eligible line items from Guaranteed campaigns. 
3. The server sends bid requests to third-party demand partners and Google Authorized Buyers. The server uses ‘Yield Group’ and sends bid requests to eligible demand partners in each group to collect the highest bid from them.
4. Once the Ad Manager receives bids from all yield groups, it runs a unified auction and compares the bid from direct deals (Guaranteed campaigns, etc.), Google Authorized Buyers, and other demand partners.
5. After the auction is over, a winner (who bids the highest) is selected* and the ad creative is served to the user.

*Note: Google ensures that the Guaranteed Campaigns are delivered on time irrespective of Open Bidding winner. 

Benefits of Open Bidding

Reduced latency: Direct server-to-server connections to third-party ad exchanges or SSPs in Open Bidding reduces latency for a more seamless user experience. Besides, if an ad request takes longer than 160 milliseconds, it will time out in the auction. Thus, reducing the latency to a greater extent.

Reporting and Analytics: Improved reporting makes it easier for publishers to quickly and easily identify revenue-generating sales channels and prioritize them for maximum revenue yield. Ultimately, reporting and analytics in Ad Manager provide transparency into all sales channel relationships.

Reduced operational complexity: Setting up Open Bidding only takes a few minutes and doesn’t involve any technical skills. Unlike in the case of Header Bidding*, where you have to add the Javascript code to your site and run the auction, Google takes care of that for you when you implement Open Bidding. Hence, reduced operational complexity.

 *Sidenote: With an Open-source Header Bidding solution like Prebid, you must have in-depth tech skills or outsource the ad-ops. However, a Managed Header Bidding solution can help you manage everything – from setting up ad tags to optimizing the ad campaigns.

How to set up Open Bidding?

Before you begin with Open Bidding, there are a few prerequisites and tasks that you must know:

1. You must have a Google Ad Manager 360 account. If not, then there are other ways to get a Premium account. Learn more about it here.
2. You need to create an Open Bidding addendum and add it to your Ad Manager account. You can contact your Google Account Manager for more information.
3. You need to establish partnership agreements with each demand partner.

Once you’re done with these, you have to set up line items, ad units, demand partners, etc. In this article, we’ll walk you through the steps required to enable Open Bidding and how to check the performance in your Ad Manager account.

Is Open Bidding compatible with the Multiple Customer Management Program?

The advantage of using Multiple Customer Management (MCM) is that the partnership is far more flexible and robust than Google’s Scaled Partner Management Program. With MCM, you will be able to easily set up Open Bidding as well as Programmatic Guaranteed or Direct deals.

The Caveats of Open Bidding

Low Match Rates: Open Bidding is disadvantaged by the fact that the ad request is sent by the ad server, not by the user’s browser. This affects the match rates as DSPs cannot synchronize cookies and identify the users*. It could result in some very low-performing and irrelevant ads showing up on your site, which could lead to a decline in revenue.

“Supply-side platforms that are running server-side would no longer have access to the user’s browser and, much as demand-side platforms are doing now will have to sync with the one player that has the tag down and is initiating the call from the browser. The concern is that this may lead to reduced match rates and lower yields on unmatched users.”

– Digiday

*This could change based on the adoption of identity solutions once third-party cookies get completely disabled by Google.

Less Transparency: Google manages every aspect of ad serving including billing, reporting, inventory, and optimization. You will have no control over which ad wins in the auction, and the server will make the decision to deliver the winning ad. Thus, reduced transparency.

Open Bidding Vs. Header Bidding: Which one is better?

We already know that a bold statement like ‘the best way to get more revenue is by investing in different techniques’ cannot be simply true for all.

Open Bidding is right if you focus on improving user experience and emphasizing less about eCPM. You might be able to reduce the latency but that may sacrifice the revenue. In contrast, if your primary goal is to increase eCPM, then Header Bidding is a perfect solution. You might be able to get higher revenue but you need to put extra effort to deal with the latency issues that arise*.

*Please note that an ideal or right header bidding solution will have little to no impact on page loading speed and doesn’t affect user experience.

Check out this article where we compare both techniques in detail.

Can you run Open Bidding with Header Bidding?

Yes, Publishers are all about finding better yield. Most of the industry’s attention is focused on improving header bidding performance and driving more volume. There are ways to further optimize those steps, though: a hybrid approach that utilizes client-side and server-side can be an effective way to boost yield even further.

With Prebid and Google’s Open Bidding already in the mix, publishers are now adding Amazon’s solution (Unified Ad Marketplace) to their ad stack. So, yes, you can run both and maximize the yield.

What’s next?

The rise of programmatic in recent years has brought about numerous changes to the dynamics of online selling and buying. Open Bidding remains a great way of having your impressions sold to larger advertisers with higher bids, all while keeping your page load time low. However, despite Open Bidding’s success in certain situations, header bidding may be better suited for publishers who are interested in transparency and have the expertise to reduce page latency. 

At Automatad, we understand your business needs and the perceived barriers to running Header bidding or Open Bidding and can address your concerns through innovative yet straightforward technology. We work with 300+ publishers closely to configure a solution that fits their specific needs and gives them profitable incremental revenue, while providing an easy and seamless user experience. Sign up today.