Header bidding is a popular technology aid that publishers are using in their ad tech stack. It boasts of a wider reach for publishers, higher inventory auction rates, improved control and quality. Unlike Google Ad Manager, header bidding offers external demand partners an opportunity to buy impressions.
If this technology has caught your interest and you are wondering what is header bidding, how does it work, and if it is the right fit for you, this comprehensive guide will answer your questions.
What Is Header Bidding?
Header bidding is a programmatic technology wherein publishers can offer their inventory to multiple demand partners in real-time. As the bid requests are taken simultaneously from different sources on the ad inventory, every bid is sold at its highest possible value, depending on the demand.
In the case of Ad Manager, Google does allow publishers to add external sources to their ad stack. Still, it bought off impressions before publishers opened the ad inventory to external partners. Header bidding overcomes this drawback by offering publishers the control as to who they can sell their ad space to and enables them to offer the same ad space to multiple ad exchanges and SSP at the same time.
Header bidding is also known as pre-bidding, parallel auction, advanced bidding, and full bidding, among other names.
What Is The History Of Header Bidding?
Before header bidding, it was the waterfall method that was used to sell ad inventory. The waterfall is a programmatic technique in which the publisher's stock is sold linearly depending on the ad exchange's priority. These ad exchanges are stacked from high to low priority according to their performance. The impressions are passed from one exchange to the other in the sequential waterfall method.
Drawbacks Of The Waterfall Method:
● The waterfall method offers little to no control to publishers selling their ad inventory.
● The impressions are purchased by ad exchanges that belong to the highest priority category rather than the highest bidder.
● With this technique, publishers lose out on revenue.
● It is a time-consuming process as inventory gets passed from one ad exchange to another.
How Does Header Bidding Work?
As soon as the webpage begins to load on a browser, header bidding is initiated with the code included in the page header. This header code calls on multiple demand partners to bid on the impression before contacting the ad server. The demand partners, in return, hold their auctions to determine the highest bid to be placed in the main header auction. The highest bids are then finally placed by the demand partners on the publisher's ad server.
The process of header bidding completes within the publisher's timeframe, which typically lasts only a second. The publisher also gets to decide which demand partners can participate in the auction process.
Header bidding overcomes the drawbacks of the waterfall technique by allowing multiple demand partners to bid simultaneously irrespective of their size.
What Is Client-Side vs. Server-Side Header Bidding?
In client-side header bidding, the auction process of ad inventory takes place on the user's browsers. If you are looking for better-targeted ads, then the client-side technique wins as it allows for higher cookie matching rates. However, the drawback of this technique is that it could cause high page latency issues.
In server-side header bidding, the auction process is conducted on an external server away from the user's network. The external server overcomes the drawback of page latency observed in the client-side implementation. However, ad-targeting suffers as the cookie match rates decrease.
What Are The Advantages Of Using Header Bidding For Publishers?
According to Statista, by the end of this year, about 75% of sites used header bidding as a part of their ad stack technique.
● Publishers can reach out to multiple advertisers interested in purchasing their ad inventory.
● Improved control as the publisher can decide who can participate in the auction process.
● Header bidding results in increased revenue for publishers as the highest bidder wins the impressions.
● Advertisers get to bid on quality and relevant ads that would not have been available through the direct sales method.
● It brings transparency to the process as publishers can easily track transactions and take stock of the inventory.
The Bottom Line On Header Bidding
Now that you know what is header bidding, how it works, and its advantages, it should be a part of your ad stack technique. Both publishers and advertisers can benefit from this process. Publishers have control over their inventory, leading to increased revenue. Advertisers can bid for premium inventory for improved ad targeting.
