Abstract
Header bidding refers to an innovative, smart service for online advertising. It facilitates concurrent, automatic real-time bidding for ad spaces on online publishers’ websites and thereby supports online publishers’ in their efforts to tackle Google’s dominance in the online advertising market. Interdisciplinary service science research on the opportunities and challenges of smart header bidding services is still scarce. To this end, we analyze a comprehensive dataset, covering header bidding solutions and connected supply-side platforms, for the top 20 German website publishers. We carve out requirements for establishing header bidding as a successful smart service in the digital arena and offer some guidance on how to design and take advantage of header bidding services for monetizing publishers’ online content. We further suggest that publishers must monitor rising header bidding substitutes, such as Google’s exchange bidding, to secure sustainable value creation from header bidding as technology-based service transformation in the digital world.
Highlights
Publishers were among the first to benefit from digitization
We provide an overview of header bidding as a smart service increasingly gaining ground in the advertising market
The industry ranking provided by IVW (2018) and presented on statista.de provides us with the top 20 German website publishers as a starting point for assessing commonly employed header bidding wrappers and supply-side platforms
Summary
Publishers were among the first to benefit from digitization. On the Internet, they can distribute their content such as articles, songs, photos, or videos faster and to a broader audience than via traditional media. Online publishers’ two main – partially intertwined – business models are (1) generating direct revenue from selling online content ‘per unit’ or via subscriptions to the users and (2) generating indirect revenue from display advertising on their sites. Radically decreasing transaction costs pose a significant challenge to monetizing online content (Shirky, 2008) and erode the online publishers’ business models (Cook and Attari, 2012). We focus on publishers selling slots for online display advertising. Automated and smart technologies are dominating the business of selling ad services – even if the established basic business model does not change: after selling a slot for online display advertising, an ad is shown on a publisher’s website
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