The digital advertising industry has been dominating the news cycle for over a week now. It all started with the YouTube boycott, where advertisers withdrew their spend due to inventory being placed alongside extremist content. And now, Facebook has announced their header bidding solution, which is the latest craze in the industry. In a recent article by Yuyu Chen at Digiday, she explores the winners and losers of this announcement.

Here are some additional thoughts on this move:

What It Means For Publishers

The Facebook header-bidding solution (FAN) is an excellent new “differentiated” demand source for the vendors chosen to participate (Index Exchange, Media.net, Sonobi, etc…), and could potentially be a nice boom to publishers that are using those vendors header-bidding wrappers.

Many publishers are in need of new monetization solutions when it comes to mobile web, as their existing desktop “stacks” and partners aren’t able to recreate the yield and revenue in mobile. Further, mobile traffic and inventory is exploding, exacerbating the challenge for publishers to manage ad revenue yields since their mobile inventory is now larger than desktop.

Revenue Potential

FAN was reportedly on a $1B revenue run rate at the end of 2015, so with another year of growth behind it, that could potentially pump another $1.5B-$2B into the ecosystem across mobile web publisher supply in 2017.

The Differentiator: Unique, Premium Demand

There are an abundance of supply-side technologies (and vendors), and with little differentiation among them, any vendors bringing unique, premium demand to their supply partners stand to gain. FAN certainly has the unique demand, as it’s leveraging the enormous pool of Facebook advertisers, allowing them to find targeted consumers who are matched with Facebook data on the mobile web. This drives quality CPM demand at scale for publishers and the header-bidding partners who provide the connections.

What Lies Ahead?

As publishers battle latency issues, it will be interesting to see if Facebook integrates a server-to-server (S2S) connection, taking the bidding and auctions out of the browser, and moving it to the server. This becomes more and more important as we move into a mobile-first world, since page load times are a major concern.

Currently, we hear distorted reporting from our publishing contacts, as many are using header-bidding technology, but many of those are also not using a header-bidding wrapper. Which is another reason for going straight to S2S.

One Challenge For The Entire Industry (especially from a publisher’s perspective):

Who are the experts publishers will rely on to implement, manage and optimize any of these solutions? Finding personnel for their own teams who have experience in these areas is extremely hard, and likewise finding trusted partners is just as difficult.

Overall, FAN is an excellent new, heavily mobile-demand source to tap into. Any mobile-first or mobile-only demand partners are of interest, as the “mobile gap” for publishers continues to grow, and filling said gap with technology vendors, with mobile demand/revenue partners, with talent, will be an ongoing challenge.