Tom Kershaw is deadly serious about header bidding.

Last year, his company felt the pain of the new technology, which allows publishers to entertain multiple simultaneous ad bids for higher yield. Rubicon conceded it had been slow to roll out – an admission that sent its stock tumbling, forcing it to make wide-ranging lay-offs and prompting it to spend $38.5mn to buy nToggle in a bid to plug the hole.

But now, in this video interview with Beet.TV, Kershaw, who then came in as Rubicon’s chief technology officer after running Google’s ad products in APAC, leaves little doubt that Rubicon understands header’s impact, and where the company can make the biggest dent.

“I think people sometimes underestimate how much effort you have to put in to making sure things work,” he explains.

“The specific implementation issues we’ve gone through in the last year, I think the biggest one was we found that, as an exchange, our full-time job was integrating with other exchanges. And so we didn’t have resources anymore to build new features and build all these cool new things and put new reporting pieces in place, because all we were doing was integrating with other (header bidding) wrappers.”

This September, Rubicon Project, PubMatic and AppNexus launched, an open-source version of the client-side Javascript “wrappers” on which header bidding depends.

Whilst many ad-tech rivals had launched their own wrappers, Kershaw says he sees them as a “commodity”, just a few lines of code that anyone can reproduce. It is elsewhere in the stack, he says, that header bidding can be differentiated – in the reporting, analytics, cookie matching, user identity and measurement.

“That all is going be done server-side,” Kershaw adds. “That is kind of where all the real heavy lifting is taking place.”

But he sees three issues that are now threatening to hold back development:

  • User identities: Difficulties with dropping cookies pose a challenge to developing cross-device consumer profiles.
  • Auditing and reporting: Insufficient explanation and products on offer to make insight clear to users.
  • Private marketplaces: “They don’t work correctly in header bidding today, and we have to fix that because we’re moving down a road where long tail buyers or open market auctions compete directly with deals based on price.

Kershaw leaves Beet.TV in no doubt that header bidding is transformational.

“Header bidding is becoming the new infrastructure,” he explains. “The implications of header bidding are far and wide. They go up and down the stack, and I think a lot of us didn’t realize the full implications of moving models.

“The old model was based on exclusive access to inventory and being able to monetize that inventory. The new model is, you see all the inventory, but you have to fight and monetize every impression.

  • “It’s a much more transaction intensive business, and it’s a much different model.
  • “It affects auction types, first vs second price auctions.
  • “It affects cookie matching and identification of users.

“So, pretty much everything that the ad tech industry found to be foundational has crumbled and changed as a result of header bidding.”

This segment is part of a Beet.TV series on innovation in programmatic advertising around header bidding and wrappers.  The series is presented by PubMatic.  For more videos from the series, please visit this page