Optimize Revenue with Header Bidding

Header bidding is an advanced programmatic advertising method in digital advertising. Header bidding allows publishers to offer ad inventory to many demand partners at once and enhance yield, so many of them utilize it to get more revenue.

As of the first quarter of 2022, header bidding technology adoption in the US has reached 70%.

This article goes into detail regarding the specifics of header bidding and how it optimizes the publisher’s revenue.

What is Header Bidding?

Header bidding, also known as pre-bidding or prebid, allows publishers to offer their ad inventory to multiple demand partners simultaneously. By increasing competition and allowing many demand partners (SSPs, ad exchanges) to bid on the same ad inventory, publishers can sell their ad inventory for the best price.

What is The History of Header Bidding?

Around 2014, header bidding replaced waterfall, another well-liked method of selling ad space, and it quickly became the industry standard. Daisy chaining, another name for waterfall, was first created for publishers to resell their leftover ad inventory. Publishers used to rely mostly on direct deals, which were given priority in their ad server. 

Once the publisher sells all of his direct campaigns, the remaining ad inventory will be given to demand partners, who bid on it using a waterfall (sequence) approach. The demand partners (SSPs/ad networks) are ranked based on their size and the average historical performance they have generated for the publisher. Thus, the top-ranking SSPs and ad networks will have the best eCPM, fill rate, latency, etc. records.

The impressions are then transferred between SSPs and ad networks until they are sold. CPM costs drop during this process, and advertisers can access more premium ad inventory for bidding.   

Due to waterfall-related inefficiencies, the industry demanded a better solution. Header bidding entered the picture in this way. After a year or so, more prominent figures began to discuss it, and this technique gained broad popularity.

Programmatic advertising entered a new era with the publication of an article by AdExchanger titled "The Rise Of 'Header Bidding' And The End Of The Publisher Waterfall" in 2015. There are two primary difficulties that the buy-side and sell-side were arguing over were successfully resolved by header bidding:

1. Publishers were able to increase their revenue from each sold ad impression.

2. It gave advertisers an equal opportunity to take part in the bidding process and place a bid on the desired ad inventory.

How Does Header Bidding Work?

Header bidding works this way:

1. Publishers must first paste the header bidding code into the website header. 

2. The wrapper calls each demand partner with an advertisement as soon as the user lands on the page.

3. Now, the demand partners make their bids available. To avoid page latency, bidders are typically given a time limit or timeout (typically, this period is roughly 200—600ms). 

4. Following that, the bids are transmitted by the wrapper to the publisher's ad server.

5. The real-time auction is won by the highest bidder, whose advertisement appears on the publisher’s page.

The Benefits of Header Bidding for Publishers:

1. Have control over pricing floors, timeouts, demand partners, and other aspects.

2. Minimum ad discrepancy because of a single auction.

3. Higher fill rate.

4. Revenue increased compared to Google AdSense by 30-80%.

5. Several demand partners compete for the same ad inventories.

6. Utilizing bid-level data for advanced analytics and reporting.

7. Reduced chance of underselling ad inventory.

The Benefits of Header Bidding for Advertisers:

1. Increasing the chance to place a bid on the premium inventory without interacting directly with publishers.

2. Advertisers can use bid-level data from publishers to modify their bidding strategies going forward.

The Challenges of Header Bidding:

1. Difficult setup and upkeep unless using a platform for monetization, like Ampliffy.

2. High page latency due to header bidding on the client side.

Choosing Your Header Bidding Platform

Platforms for header bidding, such as Ampliffy, are referred to as monetization platforms. These systems provide customer assistance and fully managed website monetization options to publishers.