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InContext / An inside look at the business of digital content

Server-side tech will drive the future of publisher digital advertising revenue

July 29, 2020 | By Josh Torok, Senior Product Manager – Nativo@nativo

Every war produces collateral damage. And the browser wars are no exception. 

For years, publishers reactively adjusted their monetization strategies based on browser changes to accommodate a rapidly changing landscape in the name of revenue preservation. Many publishers rely on client-side bidding via web browsers to monetize their sites, despite lackluster performance and unpleasant side effects. These include clunky, slow loading sites, personally identifiable information (PII) vulnerability, and interruptive, obtrusive ad experiences.

The resulting situation is driving new publisher approaches – including server-side technology – that have a tremendous impact on their business. The industry is reeling from the economic impact of Covid-19, reacts to CCPA enforcement, and readies itself for the next phase of digital advertising. Yet at the same time, publishers must address certain fundamental technology blockers in the name of reclaiming their monetization strategy and futureproofing their ad revenue through server-side technology.

Let’s assess how investment in server-side solutions will catalyze greater autonomy, sustainability and innovation for publishers in the long run.

Client-side vs. server-side bidding

In client-side header bidding, also known as browser-side header bidding, publishers take their inventory to multiple demand partners as impressions become available. Ad requests are sent to demand partners to place their bids. The highest bid is selected and the winning bidder’s ad is displayed. Code, or JavaScript (JS), lives on the publisher’s page and is executed on users’ browsers when they visit the website.

With server-side header bidding, auction logic is executed on a server. The user’s browser makes a single request to the server, which sends and receives all bid requests. Once the bid is sold, the ad is displayed without affecting page load time.

The browser is not your friend

Many publishers rely on client-side bidding for site monetization through digital advertising. However, the dynamics aren’t always in their best interest.

  • Poor User Experience Due to Latency: JS and ad tags are notoriously slow. That’s because they’re dependent on the number of ad slots and prioritization of when and how they load. Slow load times result in jumpy, inconsistent content, poor browsing UX, and attrition as a result of reloading or exiting the page.
  • Non-Data Regulation Compliance: Ad tags in and of themselves are not inherently non-compliant. However, the tag, not the publisher, determines what data is sent to a partner. If code sends data to another partner without explicit user consent, publishers are susceptible to substantial privacy legislation enforcement. Publishers that do not own all of the code on their page are at risk for non-compliance.
  • Browser Overreliance: Browsers serve as a home base for publisher audiences, auctions, rendering and more. With continual shifts in browser dynamics, there’s escalating opportunity cost associated with publisher over-reliance on an environment in which they exert minimal control.

Some of the browser-based workarounds publishers leverage today likely won’t be viable tomorrow. To extricate themselves from the dynamics of client-side bidding, publishers should invest in server-side technology that will lay the groundwork for monetization innovation in the future. 

The solution is server-side

Server-side technology will ultimately be a catalyst for publishers to reclaim autonomy, sustainability, and control of monetization today and well into the future. There are three chief benefits of server-side technology that pave the road for publisher success:

  • Optimal User Experience: Server-side technology, like content distribution networks (CDNs), preserves the user experience by enabling publishers to optimize sites for faster load times and lower latency. The result? Improved UX and prioritization of when and how ads load. The faster the pages load, the better the user experience will be. And better UX translates to persistent, returning audiences that can be monetized. The introduction of CDN edge computing transitions decisioning around each ad unit – how auctions are managed and when units load–to publishers themselves. This results in optimal monetization and UX. 
  • Identity Solutions: The end of third-party cookies on Chrome is less than two years away. Server-side solutions position publishers for their next phase of innovation: solving for audience and attribution. With the decline of the 3rd party cookie, identifying, targeting and attributing actions to website visitors becomes increasingly challenging. Newfound autonomy will extract publishers from the browser wars. It will also facilitate implementation of identity solutions like publisher first-party identifiers or LiveRamp’s Authenticated Traffic Solution (ATS). This improves addressability across the open web by matching known users to a persistent identifier and enabling marketers to target users in a privacy-first manner.
  • Control: With client-side bidding, publishers are beholden to decisioning they can’t control, like browsers blocking third-party cookies or the introduction of a new algorithm. But with server-side logic, publishers are empowered to build their own valuable walled gardens, where they determine the rules, dynamics and monetization strategy.

Long-term goals

Server-side solutions – like a prebid server – might result in temporary revenue decline due to a departure from third-party cookie targeting. But that revenue is short-lived. Publishers are wise to play the long game. The innovation and revenue growth of server-side platforms like Amazon suggest the short-term inconvenience is far outweighed by the long-term reclaim of revenue control. 

To extricate themselves from browser dynamics, ensure data regulation compliance, build groundwork to preserve UX and preserve tomorrow’s monetization, publishers are wise to look to the server: Investing in server-side innovation today is the ultimate future-proofing for publishers’ businesses tomorrow.

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