In-House Vs. Outsourced Ad Management

The most addictive drug in today’s world is comfort. The same is true when it comes to businesses. For example, let’s take programmatic advertising. Efficiency, transparency, and control are a few things that publishers want to have.

Closed systems, including the walled gardens, are ready to provide you with efficiency comfortably. The cost is you will have to ease your grasp on control.

On the other hand, there is the open system, like Prebid, with endless flexibility and unhindered control. But for this, you will have to move out of your comfort zone and be self-reliant. Especially when it comes to minute details like - configuration and optimization.

Prebid is a free and open-source suite of software products designed to help publishers. Its most common use is to facilitate header bidding, with about 1% of the top 1 million websites using it for the same.

However, there are still many publishers who think programmatic advertising, especially header bidding, is a race toward the bottom. Let’s evaluate this myth together.

We will travel deep into the realm of prebid, look for its best warriors, find out how they may impact your business, and then roll on our judgment. So, let’s dig in.

The Myth - How It All Started

It all started with the initial concept of using programmatic advertising, especially real-time bidding, to sell remnant inventories. Many believes that it inevitably leads to lower CPMs (cost per thousand impressions) as compared to direct deals. It also dilutes the ad quality, as you want to fill your inventory at any cost.

It might be a fling of the past, but situations are completely different now. It seems ironic for something from the bottom to be so highly competitive. Advancements in technology, automation, and the power of data have done nothing but propel digital advertising toward its peak. These technologies foster a more competitive, transparent, and efficient market, which, in turn, leads to better outcomes for publishers, advertisers, and users alike.

Prebid and Header Bidding - Friends with Benefit

When I was new to the industry, I thought header bidding and Prebid were synonyms. Well, they are, but not technically.

Header bidding

Header bidding, we can say, is the bigger picture here. In programmatic advertising, it’s the bidding technology that calls all the demand partners to bid for an impression before the ad server is called.

Whether you are using an open-source header bidding, proprietary header bidding solution, or managed bidding solution, in any case, you get a code. Now, you add this code in the header* section of your website between the <head> tags. Thus, the name header bidding.

(*The point to remember here is that there are instances where adding the code to the header is not required. We will talk about it sometime later.)

Types of Header Bidding

Client-Side Header Bidding:

Here, the auction happens within the user's browser. It allows publishers to directly connect with multiple demand partners. However, it can increase page load times due to the number of bids being processed on the client side.

Server-Side Header Bidding

To address the latency issues associated with client-side bidding, server-side bidding processes the auction on a server. This reduces the load on the user's browser but can limit transparency since the auction occurs away from the publisher's view.

‍Prebid

Prebid offers free, open-source software tools and libraries specifically designed for implementing header bidding. You see, how it’s part of the big picture.

Prebid is not itself header bidding but rather a set of tools specifically designed to facilitate the implementation of header bidding. It saves you time and effort since you do not need to build everything from scratch. It more or less is like a “header bidding enabler”.

The main components of Prebid are:

Prebid.js:
A client-side JavaScript library that enables publishers to set up header bidding on their websites. It integrates with multiple demand partners simultaneously, allowing them to bid on ad inventory before making calls to the ad server.
Prebid server:
It enables the server-side auction. The Prebid server complements Prebid.js and reduces the load on the users’ browser.
Prebid mobile:
Prebid Mobile provides the header bidding framework designed for mobile apps. It extends the benefits of header bidding to the mobile ecosystem, where traditional header bidding techniques are not directly applicable.
Prebid video:
Prbid video leverages the Prebid.js framework to monetize video ad formats, including both in-stream and out-stream video ads.

How Prebid Works?

Prebid.js - Client-side bidding

Step 1: Integration

Add the Prebid.js library with your customized configuration code to the website’s header.

Step 2: Activation

As the page loads, Prebid.js initiates parallel, asynchronous requests to configured demand partners through configured adapters.

Meanwhile, it pauses the ad server’s tag, and the server is not called. For example, if you are using GAM as an ad server, then it will pause the GPT (Google Publisher Tag) from calling GAM.

Step 3: Before Auction
Each adapter retrieves bids and creatives from respective partners within a preset timeout.

Step 4: Auction

Prebid.js conducts an auction within the timeout, considering factors like price, size, format, and targeting.

Step 5: Storage

The highest bid (meeting the floor price) wins, and the corresponding creative is stored locally.

Step 6: Transmission

Prebid.js transmits winning bid details to the ad server via query string parameters*.

Step 7: Decision
The ad server chooses the best bid (considering Prebid and other options) on set criteria. If accepted, it retrieves the creative from Prebid.js and displays it.

Prebid Server - Server-side bidding

Step 1: Integration

Configure your demand partners and do the initial configuration in the Prebid server.

Step 2: Activation

The Prebid Server acts as a proxy, simultaneously contacting chosen partners through adapters.

Step 3: Before Auction
‍
Partners respond with bids, which are filtered and processed server-side based on your rules.

Step 4: Auction

All filtered bids participate in a unified auction on the server.

Step 5: Storage

The highest bid (meeting the floor price) wins, and the corresponding creative is stored locally.

Step 6: Transmission

Details are sent to your ad server, along with the associated creative stored on the Prebid Server.

Step 7: Decision
The ad server chooses the best bid (considering Prebid and other options) on set criteria. The winning creative is served.

* As a publisher, you will need to add line items in the ad server targeting your bid parameters.

What’s inside the Prebid.js library?

There are three components:

The Core wrapper code
The Adapters a publisher wants to work with
Optional modules the publisher wants to utilize

You can learn more and in-depth about Prebid.js at Prebid.

Prebid Modules - The Flexibility to Scale

Prebid.js and Prebid server - both come with modular frameworks. It means that you can add optional plugins or modules to the core framework (wrapper). These add-ons address your specific needs and enable advanced features for header bidding.

Modules for bid validation, security scanning, user identification, GDPR/CCPA compliance, price floor module, analytics tracking, etc., are a few examples of these add-ons.

Advantages of Using Prebid for Header Bidding

Well, for starters, you need it for transparency, control, flexibility, and to get better demand.

Analytic advantage -

Prebid offers sophisticated analytics capabilities, allowing you to monitor auction performance, bidder behavior, and revenue metrics in real-time. You can thus make informed decisions on which ads to serve based on the highest bidder or other predefined criteria, ensuring that every impression is monetized at its true value.

Granular control -

Prebid offers granular control over every aspect of the ad selling process, from selecting demand partners to setting price floors. It tells you who is bidding, how much they are bidding, and which bids are winning.

Streamlined operations -

The versatility of Prebid extends to its support for a wide range of ad formats (display, video, native) and platforms (desktop, mobile web, in-app). You can use a single, unified framework to manage all their programmatic advertising needs.

User-optimized ads -

Prebid's design prioritizes user experience, with features like asynchronous loading and advanced timeout settings that minimize the impact of ad auctions on page or app load times.

Continuous Innovation -

Being an open-source project, Prebid is continuously evolving, with contributions from a global community of developers. For you, it is an investment in a technology that keeps pace with changing advertiser demands and user behaviors.

What Is Prebid Wrapper?

Prebid wrapper is an open-source bidding wrapper that lets web publishers and app developers set up and run header bidding themselves. It is commonly known as Prebid.js or container.

Prebid wrapper is designed to simplify the integration and management of multiple demand sources in a publisher's header bidding setup.

You can either use the Prebid wrapper available on Prebid or partner with a managed header bidding provider. These providers build wrappers on top of Prebid, and you get access to their demand partners as well. However, if you have an in-house Prebid wrapper, you will have to bring your own demand partners.

What Is Prebid Adapter?

Prebid adapters are modules within the Prebid ecosystem that facilitate communication between the publisher’s ad inventory and the demand sources. An Adapter is the bridge between the Prebid wrapper and the specific demand partner.

Prebid - In-House Team vs. Managed Service Provider

Although it’s an open-source, you will need a robust team of tech savvy individuals to configure, optimize, and run your Prebid setup seamlessly and profitably. Now the question comes - how? Do you need an in-house team for this or partner with a managed service provider? Let’s explore -

In-House Team:

Benefits -

Get greater control over the whole setup. You can build tailored configurations that seamlessly satiates your needs.
Full transparency and control over data, code, and decision-making.
Ability to quickly adapt to changing market trends and develop custom solutions.
No share in the loot. Whatever revenue you generate will be your net revenue profit. However, it won’t account for the expenditure on resource management.

Challenges -

You have to find and bring your own demand partners on the board.
Demands a high level of technical knowledge and expertise in programmatic advertising - a competitive and expensive market.
Requires time and resources for maintenance, updates, and troubleshooting. Weigh these costs against the potential benefits.
Managing privacy compliance, getting good demand, or expansion in terms of team or expertise - every task is a tad complex.

Managed Service Provider:

Benefits -

You get access to experienced Prebid specialists for setup, optimization, and ongoing support.
Bringing the correct demand partners on the board is now your partner's job.
The best provider grows and adapts as your business grows. They are built to scale. Not your burden.
The providers offload management tasks, freeing internal resources and you for other priorities.
Best providers come with best practices and utilize established methodologies for optimal performance and revenue generation.

Challenges -

What’s your net revenue profit? Many ad tech providers are notoriously famous for taking a great share of your revenue for their services.
You might experience less immediate control over day-to-day operations.
With some providers, switching can be burdensome and complex.

If you are musing over the decision, consider the following:

Size - Larger publishers with substantial resources may benefit more from an in-house team, while mid-size and small publishers might find more value in a managed service.
Priority - Do you prioritize complete control and customization or value faster time-to-market and reduced operational burden?
Budget - An in-house team may require a larger upfront investment, while a managed service provider could offer more predictable costs.

What “Gemini” suggests (and I agree)-

Combine a managed service for core functionality with custom in-house modules for specific needs.
Carefully research and compare managed service providers based on experience, expertise, fees, and client testimonials.
Consider how your needs and resources might evolve as your business grows.

Best Practices for Optimizing Prebid

Demand partner: To maximize revenue, ensure you have a diverse range of demand partners integrated into your prebid setup. This diversity increases competition for your inventory, driving up CPMs.

Price floors: Implement dynamic price floors based on real-time data and analytics. Mile’s Dynamic Flooring is built for the Prebid ecosystem and adjusts the price floor regularly to reflect market demand and inventory value, preventing the underpricing of valuable ad slots.

Asynchronous loading: Implement prebid.js asynchronously to ensure that your website's content loads without waiting for bids to complete. This approach minimizes impact on page load times, preserving user experience.

Prebid's analytics: Utilize Prebid's analytics tools to gain insights into bidding patterns, win rates, and other key performance indicators. Use this data to refine your setup, demand partner selection, and auction strategies.

Cross-platform monetization: Expand Prebid's application to mobile apps and video content - beyond traditional web display advertising. Prebid mobile and Prebid video can unlock new revenue streams and increase engagement across all platforms.

Programmatic direct and private marketplaces (PMPs): Use Prebid to facilitate deals in programmatic direct sales and PMPs, leveraging its efficiency and transparency to secure higher-value transactions with preferred partners.

Dynamic content optimization: Integrate Prebid's real-time bidding data with content management systems to dynamically adjust content and advertising strategies based on user engagement and advertiser demand.

Prioritize privacy and compliance: With evolving privacy regulations and the impending deprecation of third-party cookies, it's crucial to adapt your Prebid setup to prioritize user privacy. Implement consent management tools and explore context-based and first-party data strategies to stay ahead.

The Truth - What We Learnt

This isn't just a race to the bottom. Simply maximizing bids isn't the sole objective. Prebid is a powerful tool to take control, experiment, and ultimately shape a more sustainable and rewarding programmatic landscape.

Moving beyond the "set-it-and-forget-it" mentality unlocks the true potential of Prebid. By actively optimizing, analyzing, and adapting your strategy, you're not just chasing fleeting bids. You're building valuable expertise and resilience. As I say, do not accommodate the changes. But innovate and be the change.

Prebid isn't just a tool; it's an opportunity to move beyond the transactional and embrace the strategic. It's a chance to redefine your programmatic strategy, build stronger partnerships, and ultimately reap the rewards.

Bonus Read-

What is Post-Bid?

Post-bid refers to the technique where publishers auction their ad inventory after it has been declined by other programmatic solutions, like an ad server or header bidding. Unlike traditional header bidding, where multiple demand sources bid on the inventory before the ad server call, post-bid occurs within the ad server after these initial opportunities have been exhausted.

‍