It’s simple auction economics — the more people bidding on and competing for an item, the higher the price the item will sell for. Why wouldn’t publishers want this for their ad inventory?

They do, obviously. But they’re not getting it under the current programmatic setup.

The current programmatic auction dynamic is a “members only club,” with many would-be buyers waiting outside to bid on what’s left after the initial auction. The approach of ‘Advance Bidding’ aims to fix that.

In an effort to shed light on this relatively new concept, here are five things you need to know about Advance Bidding.

First, just what is Advance Bidding?

Advance Bidding is a type of inventory bid management that allows publishers to offer first look and bid opportunity to multiple programmatic partners that is then carried through to the publishers adserver. The set up is powered by a demand partner’s javascript tag that is placed on a publisher’s page (usually in the header) which requests bids from the partner before the adserver is called. This is sometimes referred to as header tag integrations or tagless integrations. The demand partner passes their bid value (through a key value pair) into the ad tag(s) that call the adserver. A campaign with line items in the publisher’s adserver are pre-set to target to those parameters. If the demand partner’s campaign wins above all other opportunity, the partner is called to serve the ad at the price they bid to pay.

What is the key benefit?

At its root, the key benefit is Advance Bidding’s core concept — it enables publishers to increase bidding competition on a per-impression basis, which can drive up the price and increase overall advertising revenue. By taking cross marketplace bids and placing them in the first auction/marketplace, all marketplaces can compete to win the impression.

What’s the main drawback?

At this early stage of Advance Bidding integrations, it’s not plug and play. Since we’re talking about integrating multiple demand partners, the implementation has to be tailored to each specific partner. This type of custom coding isn’t easy, and there are no standards yet defined. Publishers who are early technology adopters shouldn’t shy away as effective functionality is achievable through proper setup. More importantly, there are concerns to address around data leakage (the browser exposes a lot about the user and the page to these buyers even if they don’t buy) and page latency. Setting up time out limits across partners so pages aren’t held up from rendering is super important to avoid hurting the user experience.

What do I need to set this up?

Advance Bidding integrations usually require help from your development team to get the code added to pages as well as support from adops to set up the corresponding campaign line items in your adserver and let’s not forget a BD resource to set up the account and integration with the platforms that offer it.

So, who are some of the vendors offering it?

The concept of Advance Bidding is available through integrations from a number of demand/marketplace platforms. To list a few: A9 (Amazon), MediaMath, Sonobi, Rubicon, Index Exchange, OpenX, and Criteo all offer it.

Here at Technorati, we see value in this approach and have built management tools to address some of the key drawbacks to this bidding method.

Source:: 5 Things You Need To Know About ‘Advance Bidding’