Google Ad Manager

How does Open Bidding Work in Google Ad Manager?

Invite multiple buyers and sell your inventory for a better price in a real-time auction. This was the idea behind header bidding when it was introduced in the market. After looking at its escalated adoption, Google launched its own product: Exchange Bidding in Dynamic Allocation (EBDA).

Later on, it was renamed as Open Bidding as a part of Google’s branding practice with the addition of some services like unified auction.

Google glorified its product to be better than header bidding – simple to set up and doesn’t contribute to latency. But is it really true? To answer this question, you must understand the working of Open Bidding.

What is Open Bidding in Google Ad Manager?

Google’s Open Bidding is a server-side unified auction where various ad exchanges, SSPs, and neworks can simultaneously bid for an impression.

Within Google Ad Manager (GAM), Open Bidding allows publishers to add their own demand partners (yield partners) along with AdSense and AdX. Once the setup is complete, the auction runs in real-time for each impression. Also, publishers get additional benefits like trafficking, reporting, and billing under GAM platform.

Who are Yield Partners in Open Bidding?

Yield partners are the demand partners (advertisers, DSPs, and ad networks) that support/sign up for Open Bidding. Publishers are required to have a contractual relationship with these partners for them to bid. Google doesn’t get involved in this relationship. It is Google’s way to allow publishers to bring their own demand and run an auction on Google’s platform.

Example: OpenX, Index Exchange, and Rubicon Project are some yield partners capable of running Open Bidding on GAM.

How is This Different from Header Bidding?

Since Google branded Open Bidding as a better solution over header bidding, people started comparing these two. However, in reality, the two are very different:

For instance, in case of header bidding, publishers are required to add JS code of every new demand to their wrappers – which resides in the head section of HTML. Whereas in Open Bidding, once a publisher has synced website and Ad Manager, there is no requirement to tweak HTML source code, over and over again. To add a new partner, make changes in Ad Manager settings and it will automatically reflect on the website.

Header bidding launched with a client-side setup where auctions run on the user’s browser. Looking at the latency issues it can cause, server-side setup was introduced. Since, Google had this data before starting with Open Bidding, it directly went for server-side auction.

Doesn’t server-side setup lack cookie syncing?

Yes, the only drawback of server-side header bidding is its inability to match cookies for targeting. However, Google claims to offer targeting with Open Bidding. This is because Google server is great at mapping users across platforms making targeting possible and efficient.

To implement header bidding, publishers must have a deep understanding of front-end computer languages (HTML and JavaScript). This is to make changes to HTML source code while keeping up with its performance. Also, adding wrapper and integrating it with a demand adapter can be a hassle.

Open Bidding makes it easier to set up auctions as GAM takes care of all the technical aspects and makes monitoring, reporting, and billing more convenient for publishers.

However, when it comes to transparency and control, header bidding wins over Open Bidding. With header bidding, everything happens ‘on’ publishers’ websites where publishers can see everything from incoming bids to bid price and timeout sessions. Whereas Open Bidding works on Google’s platform, where publishers lack certain control points, and in some cases, don’t bother to verify the process and go with the recommended/default settings.

Header biddingOpen Bidding
Auction runs onUser’s browserGoogle’s server
Technical knowledgeHigh level skills including programming languagesBasic understanding of ad tech and GAM
DemandDirect publisher-demand relationshipsDirect demand + AdX and AdSense
PaymentManaged by publishersManaged by Google
ProsBetter cookie matching and more transparency around incoming bidsLess complex, access Google’s demand, and reduced page latency 
ConsTechnically complex and increased page latencyNo cookie matching and less transparency

How does Open Bidding work exactly?

To understand how Open Bidding works, let’s divide the process into four steps:

working of open bidding

1. Website generates ad requests and sends to Google server: Whenever a user appears on the webpage, the code placed inside the ad units (Google Publisher Tag) sends a signal to the ad server (Google Ad Manager) that an impression is available. This signal contains details of ad units (size, format) and user demographics for targeting (if allowed by user). Server translates this data for demand-side and creates bid requests.

2. Server generates bid requests and passes them to demand-side: The bid requests are sent to all the buyers looking for this impression. For instance, the available impression is on 720×90 ad unit, then only the buyers looking to target this size would get the bid request. This is done by going through each line item to find the eligible one.

3. Server collects bid responses and runs unified auction: Once demand-side submits their responses, GAM runs a unified auction involving yield partners, Ad Exchange, and other direct line items.

4. Winning bid along with creative(s) sent to publisher’s website: Ad Manager, accepts the bids until timeout. Then it compares and selects the winning bid. Basis who wins the auction, Google server passes on ad creative.

Key Benefits

Reduced page latency: Since the auction runs on a server, users don’t face any page loading latency due to ads. Google’s server conducts the auction meanwhile the content loads on the user’s browser. Timeout period can be customized to match content loading time, so that, user sees content and ads at same time. 

Unified auction: It involves multiple networks, SSPs, and exchanges receiving bid requests simultaneously. Each of these buyers receive the same bid request containing details of inventory and are compared with a single floor price set by publishers.

open bidding unified auction
Source: Google Support

Greater demand: Unified auction gives publishers the benefit of maximizing demand at each step of auction. Publishers get to involve their own demand, Ad Exchange, and AdSense (in some cases). 

Technically easy: Setting up Open Bidding doesn’t require programming skills unlike header bidding. Since Google manages the auction, publishers are only required to set up the campaign and it manages everything from conduction auction to showing creatives.

Biggest Benefit: Hybrid Header Bidding in GAM

The ability to run hybrid header bidding makes the biggest difference. Hybrid header bidding is when publishers run client-side and server-side header bidding together to get the best of these auctions. But when using wrapper (like Prebid), the integration of these types, together, can be tricky and more susceptible to error. In such a case, Google makes it easy to get started with hybrid header bidding.

Header bidding and Open Bidding run side-by-side in the case of hybrid header bidding. And the winner is selected after the auction timeouts. This how it works:

hybrid header bidding
  • Impression appears and ad requests are sent to Google server, from where bid request is passed to Open Bidding yield partners and AdX demand.
  • At the same time, header bidding starts with browser-level auction and collects bid responses from its demand partners.
  • As the timeout is reached, Google Ad Manager chooses the highest bid from Open Bidding, and AdX (direct line items). And compares it with header bidding responses.
  • The highest-paying buyer is selected, server delivers the ad creative and the user sees it.

What are the Downsides?

Lacks transparency: When it comes to Google ad services, publishers often complain about the lack of transparency. This includes details related to bids, CPM, and other demand-side requirements.

Targeting without cookie matching: Since the auction runs on server, there is little information that ad request carries from website to server. This restricts Open Bidding from clearly understanding the impressions and showing perfectly targeted ads.

Tricky to understand: Using Google Ad Manager can seem complicated with all its features and functionalities. This includes setting line items, communication with demand, and generating necessary reports. This makes Google Ad Manager a black box for publishers managing content and ad operations at the same time.

If you are new to Ad Manager, we recommend you learn about the tech first. Take help from experts and read necessary resources. If the setup still seems complicated, getting help from a Google Certified Publishing Partner (AdPushup) should help.

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