“Open Bidding decimated header bidding,” Jed Dederick, chief revenue officer of The Trade Desk, told a courtroom in Virginia on Sept. 10 as he testified as a witness in US v. Google, the Department of Justice’s case that accuses Google of operating an advertising monopoly.
Dederick’s testimony is a good statement for the Department of Justice’s case, as Open Bidding was one of Google’s advertising products. The DOJ is trying to prove that Google wields a dominating amount of control over how its ad technology is used by advertisers and publishers.
But Dederick’s testimony is not exactly accurate.
The rise of header bidding
Header bidding is a solution that launched around 2015 and lets multiple publisher-focused adtech companies, called supply-side platforms, bid on a publisher’s inventory at once before reaching a publisher’s ad server. The practice of header bidding largely replaced an inefficient waterfall system that in practice, critics say gave Google, the dominant ad server, a “first look” at inventory before it was available to be sold by other adtech firms.
The focus on Google’s “first look” approach is a big part of the DOJ’s case against Google. The DOJ and its witnesses are arguing that “first look” made it hard for non-Google supply-side platforms to compete. And at times, “first look” undermined publishers’ revenue potential, multiple witnesses have testified this week in Virginia.
Google’s competitors created header bidding in part to undermine this advantage. Google responded with Open Bidding, first called Exchange Bidding, in 2016, its own version of header bidding that came with an around 5% fee.
Open Bidding is losing steam
In contrast to Dederick’s testimony, Open Bidding has been waning in its importance to the industry in recent years. Header bidding, meanwhile, is still commonly used by publishers, so much so that the problem supply-side platforms face today is having too much inventory to sell rather than too little.
In 2022, The Trade Desk, Yahoo, Amobee (now part of Tremor), and RTB House turned off Open Bidding. A Criteo executive said the tool was rarely useful, ADWEEK reported at the time.
During this week’s testimony at the antitrust case between the DOJ and Google, The Trade Desk’s Dederick echoed his firm’s previous decision. “The Trade Desk decided to shut off the Open Bidding pipe because we didn’t see value in Open Bidding,” Dederick told the court room.