Seven years ago, when publishers started applying header bidding to level the conditions of online auctions with Google, Prebid was a small open-source code snippet developed by AppNexus.

Today, this code has evolved into Prebid.org — an independent industry standardization body that develops widely-used open-source technology.

The history of Prebid.org — an organization that might never have come into existence — holds immense significance for the industry. It’s important not only for Prebid itself but as an example of how small, independent players can unite to counter the dominant influence of Google.

In 2021, Prebid.org could have become part of IAB Tech Lab. According to AdExchanger, sourced from two informed individuals, Tony Katsur (Tony Katsur) proposed acquiring this organization shortly after assuming the role of Tech Lab CEO.

A Prebid board member said that Katsur presented a brief written proposal on a potential merger between Prebid and IAB Tech Lab. This proposal did not imply a cash deal but described a possible mechanism for uniting the organizations.

The Prebid board rejected this proposal. Shortly thereafter, the organization formalized itself as an independent standard-setting body, hiring Mike Racic (Michael Racic) as its first president in 2022.

This unsuccessful merger proposal became, in essence, the second attempt to unite Prebid and IAB Tech Lab. The reasons Prebid never joined IAB Tech Lab reflect changes in the ad tech industry.

First Attempt

In 2017, when Prebid was just beginning to develop as a header bidding wrapper, AppNexus and other ad companies advocated for including this specification in IAB Tech Lab. Brian O’Kelley (Brian O’Kelley), former CEO of AppNexus, disclosed this information in his testimony during the U.S. Department of Justice antitrust case against Google regarding ad technology. Throughout this process, O’Kelley shared many details about Prebid.

O’Kelley considered IAB Tech Lab the natural environment for Prebid, as this organization serves as an industry operator for technical standards, overseeing specifications such as OpenRTB.

«The whole point of IAB Tech Lab’s existence is to adopt and develop such technologies,» O’Kelley stated in a video presented during the trial.

However, a serious obstacle arose along this path. According to O’Kelley, Google not only sat on the Tech Lab board but was also IAB’s largest financial sponsor. Last year, under oath, he stated that Google «categorically opposed» the inclusion of Prebid — and thus, header bidding technology — into the leading industry standardization body.

«Google’s reaction to this proposal was so negative that we ended up having to create an independent association,» O’Kelley claims.

Second Attempt

According to O’Kelley, after being denied entry into IAB Tech Lab, Google used its influence to impede the adoption of header bidding. He suggests that the company feared leveling the playing field for third-party ad technologies, which would deprive Google of the right of last look in its auction.

However, attempts to avoid fears often lead to their realization.

By forcing other programmatic market participants to act independently — developing open-source code, joining Prebid, funding it as a separate organization, and promoting header bidding without IAB support — Google may have inadvertently strengthened the very “competitor” it aimed to eliminate.

By the time Katsur took the helm of IAB Tech Lab in 2021 and saw an opportunity to bring header bidding back under IAB, Prebid.org had already reached a level of development that was unstoppable.

The Prebid board rejected Katsur's proposal to transfer technology to Tech Lab. One board member, who wished to remain anonymous to discuss confidential matters, explained:

«At that time, we clearly defined that Prebid was an organization engaged in code development. It was nice to be free from political issues,» the board member explained.

Katsur declined to comment on the acquisition offer. Google did not respond to requests for comments regarding O’Kelley’s testimony and his statement about the company’s attempt to influence the spread of header bidding.

According to Heather Carver (Heather Carver), CRO at Freestar and a member of the Prebid.org board, Prebid now, as a mature independent organization, possesses significant advantages in terms of speed and clarity of purpose.

She notes that within Tech Lab, there are often serious bureaucratic obstacles that hinder progress. Tech Lab tends to slowly develop new technologies, and these developments often suffer from significant constraints due to IAB’s need to balance many competing interests.

According to Carver, Prebid.org, in contrast, has a cohesive board with a unified stance and open-source developers from companies who are “in the same boat” and moving in the same direction.

Long Road Home?

In 2017, Tech Lab rejected a proposal to include Prebid.org, and in 2021, Prebid.org refused to join Tech Lab.

Is a future merger of Prebid.org and IAB Tech Lab possible?

«Yes, I expect it will happen,» said another Prebid board member, who wished to remain anonymous to share their insights on potential developments.

Could a third attempt be successful?

While many Prebid board members prefer the organization’s independence, the same source emphasized that IAB Tech Lab is the natural environment for header bidding technology. Moreover, according to them, IAB Tech Lab has significantly changed under Katsur’s leadership.

The source claims that Tech Lab now swiftly implements new standards and more decisively counters board members prone to delay.

«If these positive changes in Tech Lab continue,» they note, «and if Prebid eventually evolves into an organization focused primarily on policy and consensus-building, I can imagine header bidding returning to its home — the IAB.»

And What About Russia?

The header bidding variant in Russia, developed by «Yandex», functions differently than the classic header bidding from Prebid. Yandex’s process is closely integrated with other technologies and company products, allowing it to control not only its ecosystem but also the Russian advertising market overall.

Unlike Yandex with its proprietary technology and restriction on using ad codes on other platforms, Prebid is a completely open technology. It is applied globally, supports numerous ad exchanges and independent participants, giving publishers freedom in choosing partners and setting up auctions.

Yandex, owning the AdFox ad server, which has become the de facto standard in Russia, collects and analyzes vast data on user behavior, ad preferences, and campaign effectiveness. This enables the company to optimize ad display algorithms and improve targeting. Moreover, Yandex can apply practices like the “right of last look,” which remain unnoticed due to closed technologies. Consequently, the company gains a substantial advantage by using user activity data to offer ad placements with a high likelihood of clicks and conversions at the optimal price. This comprehensive control allows Yandex to dominate the Russian market and limit competitors’ opportunities.

Using proprietary header bidding technology from Yandex creates serious risks for market competition in Russia. Control of a key technology by a single player limits the capabilities of independent platforms and complicates market entry for international companies. Yandex, managing access to ad data, gains a significant advantage in targeting and auction dominance. This leads to a closed ecosystem, where other participants are forced either to adapt to Yandex’s rules or leave the market, limiting choices for publishers and reducing competition.

Other ad platforms in Russia face a number of challenges due to Yandex’s dominance. First, their access to essential user data and ad metrics is restricted, as Yandex collects and uses this data through its technologies. Second, integration with major publishers often requires interaction with Yandex’s ad server, putting third-party platforms in a dependent position. Furthermore, due to Yandex’s market influence and its relationships with major advertisers (commitments), small platforms struggle to access significant budgets. These barriers make the market less diverse and hinder the development of independent solutions.

Thus, Yandex’s dominance in the Russian market through proprietary technology, header bidding, and ad server provides the company with significant advantages but creates barriers to healthy competition and innovation. Although convenient for major clients, this situation limits options for publishers and advertisers, increasing their dependence on a single provider.

Instead of Conclusion

The Russian ad industry can resist Yandex’s dominance by developing independent technologies and standards to create equal conditions for all market participants. Publishers and ad networks should actively support open platforms, such as Prebid, that allow integration with multiple partners and avoid dependency on a single provider.

The first step could be to unite independent market players, publishers, advertisers, and platforms to create their ecosystem with transparent and flexible solutions. The key aspect is the active adoption and development of open-source technologies as an alternative to Yandex’s proprietary solutions. It’s also important to create a truly independent platform for communication among interested market participants.

In conclusion, it’s worth emphasizing the importance of establishing dialogue with regulators, explaining how one player’s dominance and lack of transparency hinder market development and innovation. Unfortunately, such developments seem unlikely.