What is header bidding?
Header bidding is a programmatic advertising technique. It allows publishers to offer their inventory to multiple ad exchanges simultaneously before sending requests to ad servers (ie. Google Ad Manager).
Header bidding evolved from waterfall bidding. A popular, but inefficient form of auctioning ad space. In a waterfall auction, publishers offer their ad space from ad network to ad network in a descending order of importance. The ad space is no longer available once the bid is accepted. There is a major issue with this method. For instance, say one advertiser is willing to pay more for a bid. But the bid goes to the advertiser placed above them in the waterfall auction. They lose before even seeing the inventory.
Header bidding sets an equal playing field. Everybody bids at the same time. It can earn more revenue while also giving advertisers an equal opportunity to bid on high-quality ad placements.
How does header bidding work?
- A user clicks to open a website. The publisher’s head tag requests several ad networks to bid on the ad slot to fill the available impression.
- The ad networks place their bids.
- The winning bid is passed to the publisher’s ad server.
- The publisher’s ad server connects the user to the advertiser’s server, which shows the winning ad creative.
What value does header bidding provide to publishers?
Header bidding can give publishers advantages over waterfall auctions, the biggest advantages include:
Increased revenue – With less reliance on a single SSP, overall yield and fill rates increase when publishers increase the prices for their premium inventory as there’s more competition between ad networks.
Increased control – When various demand sources bid at the same time, publishers can control which sources have the ability to participate in the bidding process.
Reduced discrepancies – Ad header bidding is a single auction across multiple partners simultaneously; there’s a high level of transparency and no sequential chaining, which drastically reduces reporting discrepancies.