By John Potter

Internet publishers face a programmatic advertising market that is still incredibly fragmented on the demand side. Given the continued move of advertising dollars to programmatic, this fragmentation is costing publishers a lot of money.

Over the last couple of years, publishers have responded by embracing header bidding. Before header bidding, publishers who used DoubleClick for Publishers (DFP) as their ad server had to rely on the integrated Google Ad Exchange, and to work independently with other demand sources — passing inventory to each, one by one, to try and maximize yield.

At every step of this waterfall approach, publishers would lose inventory and revenue.  Moreover, there was no true competition with Google Ad Exchange.

Header bidding improved on this by allowing publishers to gather bids from other demand sources and pass them into their ad server, where they could compete with AdExchange, and raise their yield without the loss of inventory.

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