There is a new buzzword in the world of OOH: mediation. Mediation is just a fancy word for being able to evaluate all the demand for a given ad opportunity at once, so that media owners can realize the highest price for that ad opportunity. It’s an important and powerful concept, but media owners need to make sure they aren’t getting duped into paying for something they shouldn’t be.
In contrast to mediation, most OOH ad serving platforms today follow a “waterfall” approach, where a given ad play follows a fixed hierarchy of demand channels, with highest priority often going to the direct sales channel, followed by a sequenced order of priority for other demand channels, such as programmatic SSPs, reseller partners, etc.
The well-known challenge with a waterfall approach is that it could leave money on the table. If a higher priority demand channel brings a price of $5 CPM for a given ad opportunity, while a lower-priority demand channel has a buyer willing to pay $10 CPM, that ad opportunity will monetize at $5 CPM instead of the $10 CPM that could have been realized.
That very challenge is the reason “header bidding” emerged in the online advertising world. Header bidding, a form of mediation, is a technical solution that enables online publishers to see all the demand for a given ad opportunity so that it can maximize revenue from that opportunity.
The technical details differ a bit for OOH, but the principle is the same. That means header bidding, which has been around for nearly a decade, offers some useful guidance into how OOH might successfully implement mediation solutions.
In the online world, header bidding has been standardized through free, open-source solutions maintained by predbid.org, an independent organization designed to ensure and promote fair, transparent, and efficient header bidding across the industry. That’s important, because in order for mediation solutions to perform their function, they must be fair, impartial and most importantly, transparent.
Various OOH companies are right now in the process of working with prebid.org on a standard solution for the OOH industry. That’s great. Even in advance of an industry-wide standard, some OOH companies have developed mediation solutions to bring the same benefits to publishers now. That’s also great.
What’s not so great is that some OOH ad serving platforms are charging media owners new fees under the guise of a mediation solution that should in fact be free.
If a so-called “mediation solution” is merely picking the highest value from among a group of bids, that can be accomplished in one line of code that looks something like this:
winning_Bid = max(bid_1, bid_2, bid_3, bid_4)
Simply put, mediation solutions should do that for free. If you are a media owner whose ad serving partner is charging you a fee for implementing that line of code, it would seem they are more focused on maximizing their own returns rather than yours.
In the online world, some publishers do pay for providing additional services that can accompany header bidding, including sophisticated yield management tools, support for custom bidding logic, advanced testing capabilities, additional reporting and analytics, and more. Those services can and do add real value, and should command a fair price.
However, after years of leaving money on the table without this functionality, some OOH ad serving platforms are charging additional fees for mediation without offering any additional services or benefits beyond the ones they already provide, other than the “one line of code” above.
Even worse, if the winning bid came from their own SSP, they are now realizing an additional fee for the same outcome that would have happened in the absence of mediation. It’s a neat trick, but media owners shouldn’t fall for it.
It’s hard enough fighting the battle to get a fair share of advertising budgets. Media owners should not also have to contend with getting charged additional fees for things that should be free.