Header bidding is one of the most critical elements of efficient advertising, where the ad space generates maximum ad revenue. There is much talk in digital advertising circles about the advantages of header bidding for programmatic advertising. But what exactly is header bidding, and how can you use it to maximize your revenue as a publisher? This post will give you an overview of header bidding, its trends, and how to implement it.
In this post
What Is Header Bidding?
| Header bidding is a programmatic advertising technology that allows publishers to present ad inventory to multiple advertisers. The higher competition then helps boost the ad revenue. |
With header bidding, publishers can offer their inventory to multiple SSPs (Supply-Side Platforms) and ad exchanges. In this type of programmatic auction, the bid requests are sent to multiple advertisers (demand partners) in real time.
Origin of Online Advertising Before Header Bidding
Before header bidding appeared, the auctions for ad space followed a waterfall model. In it, the ad space is auctioned and delivered when the page is loading.
The Programmatic Waterfall Model
In this model, the ad space is offered first to the publisher’s direct orders; then, if it is not sold, the space offer is passed down the line until it finds a better bid than the previous one. When this happens, the ad space is sold to this bidder.
The problem with the waterfall model is that you can easily miss higher bids. In the example above, the auction stops at the first “higher” bid, bid “B”, when the highest bid is “C” at $3.25, so actually, you may lose money with waterfall bidding.
How Does Header Bidding Work?
- Header bidding starts by adding a piece of JavaScript code in the header of a publisher’s page. This piece of code is what allows buyers to bid on an advertising inventory.
- When a user visits a website, the publisher’s header tag sends requests to multiple ad networks.
- The ad networks bid on the space. The winning bid is sent to the publisher’s ad server.
- The publisher’s ad server displays the winning ad.
Client Side vs. Server Side Header Bidding?
Client-side header bidding: you add the piece of JavaScript to the publisher’s website, which runs every time the page loads. The browser sends a request for bids, and the highest bid wins.
Server-side header bidding: here, the requests are sent from the ad server, not the browser.
How Header Bidding Solved The Problem Of Waterfall Bidding Issues?
In header bidding, the space goes effectively to the highest bid, regardless of its position in the auction. The advertiser’s server shows the winning ad creative to the publisher’s server.
Header bidding lets publishers know what advertiser is bidding to maximize revenue and have better exposure for their brand.
How Do You Set Up Header Bidding?
The header bidding implementation requires the ad server to connect to the header bidding wrapper. The wrapper, in turn, connects to the SSP adapter.
What’s a Wrapper?
| A header bidding wrapper is a software container running header auctions according to its rules. It sends requests to the demand side and fetches the bids from them. |
Before wrappers, the publisher needed to insert each advertiser or DDP code snippet on their webpage. Inserting and deleting those code snippets every time an advertiser change is time-consuming and tedious.
Wrappers are software containers that hold the snippets from all demand partners. Publishers can easily replace snippets without dealing with code if the wrapper has a graphic interface. The wrapper also contains the set prices and the timeouts. The most popular header bidding wrappers are Pubfood.js, BiddR360, and Prebid.js.
Steps to Implement Header Bidding in Google Ad Manager
Step 1: Building a wrapper
You can build it yourself or get it from a header bidding provider.
Step 2: Contact the SSPs.
If the SSPs want to work with you, you can incorporate their adapters into your wrapper.
Here you can see how to set up a wrapper with Prebid.js:
- Load the Prebid.js library. Go to prebid.org and download the library file in the version and with the adapters you want to work with.
- Load the ad server library file. Using Google Ad Manager, you can load the GPT library file.
- Run the header auction. Prebid pauses the first d server call, then sends bid requests to multiple demand partners. It fetches bids for the available inventory. Some useful features include ensuring the request doesn’t block the rest of the content or setting a timeout.
Step 3: Integrate the wrapper with your site.
Add the wrapper code to the header.
Step 4: Integrate the wrapper with the ad server.
You can learn how to do it with Prebid.js here.
Step 5: Test the setup.
Give the setup to your QA team or someone who worked on it previously and someone who doesn’t know about it, then check all bugs and fixes needed.
Implementation of Header Bidding Challenges
Publishers may find it challenging to implement header bidding. It is not easy to set up, and it requires to add many lines to the ad inventory. You need more upfront lift to traffic line items to implement header tag integrations.
Header bidding can impact page load speed because third-party tags may slow the loading time. The problem is when a visitor abandons the page before it loads, it will miss the ads.
Pros and Cons of Header Bidding for Publishers
How can header bidding benefit (+) publishers?
- Higher fill rates: with header bidding, more buyers are available, which increases the chances of filling the inventory. Header bidding makes it more likely to fill remnant inventory.
- Better visibility into inventory value: you can see the real price of what other publishers are selling their inventory, giving you a better picture of how much your inventory is worth.
- Higher cost per mile (CPM): the header bidding system ensures the highest bid gets the impression.
What are the drawbacks (-) of header bidding for publishers?
Using client-side header bidding has some drawbacks:
- Increased latency: more scripts on a page slow down the load time, which hurts the user experience, reducing ad views, and, ultimately, conversions.
- Compatibility issues: the client-side header needs to be compatible with different browsers. Sometimes there are compatibility issues between the header and the browser.
- Slowed-down performance: the more code you add, the chances of slowing down the website and browser increase.
Benefits and Drawbacks of Header Bidding for Advertisers
Is header bidding only for publishers? Yes, and no. Let’s analyze the advantages and drawbacks of using header bidding for advertisers.
How can header bidding benefit advertisers?
The header bidding process was designed to help publishers maximize their revenue. However, advertisers may benefit from accessing premium inventory. Advertisers see the available inventory and bid on premium spaces.
What are the drawbacks for advertisers?
That being said, accessing premium inventory isn’t cheap. Large organizations with big advertising budgets can work with premium inventory, but the expense can hurt smaller brands. Additionally, header bidding companies have access to all the publisher inventory, preventing advertisers from doing deals directly with those publishers.
Why Header Bidding Is Better for Publishers?
The advantages of using header bidding are better for publishers. Header bidding is designed in such a way that publishers can get the most yield from their impressions.
Why?
- It expands the advertisers’ pool, allowing them to reach more and better-paying advertisers.
- The automated auction increases competition between advertisers, leading to a higher bid. You know that is true if you ever got into a bidding war on eBay.
Header Bidding Trends For 2022
The popularity of header bidding and its advantages for publishers resulted in the exponential growth of header bidding solutions. The evolution is not stopping, so here are some of its trends for 2022:
- Too many options. Currently, header bidding is evolving to include multiple header bidding solutions available to publishers. Publishers have a hard time selecting the right solution. They need to consider the following factors:
- The ability to generate maximum competition to increase revenue
- The integration with the browser
- Real-time optimization
- Integration of demand channels into the same platform
- Should you build, buy, or partner? Publishers face the dilemma of choosing whether to build their own header bidding or buy/partner with a third-party provider. Using a third-party provider has the advantage of addressing a larger demand market.
- The appearance of the hybrid wrapper. Studies show that most publishers use hybrid set-ups (client-side and server-side combined) solutions. Additionally, omnichannel wrapper users are more likely to rely on hybrid wrappers.
What Is Open Bidding?
Open bidding is a programmatic bidding system that lets publishers invite advertisers to bid on auctions. The new auction is in real-time and server-to-server. It is easier to implement than header bidding because you can reuse your existing tags.
Header Bidding Vs. Open Bidding
Header Bidding vs. AdSense
FAQs
1. What’s the difference between header bidding and pre-bidding?
In header bidding, the demand partners are contacted before the request is sent to the ad server. Prebid is another term for header bidding, where the demand partners compete for the ad before the ad server sees the impression.
The post-bid model, allows the publisher’s demand sources compete in one auction based on a price after the server declined to choose a direct sell.
2. What is the difference between header bidding vs. waterfall?
In the waterfall model, the system offers the ad space to the first demand partner, if the price doesn’t match, then the second, then the third, until it finds a higher bid than the previous one.
The header bidding model offers the ad space to all demand partners at the same time and choosest the highest bid of all.
3. How many types of header bidding are there?
There are two main types of header bidding: client-side and server-side.
In the client-side header bidding model, you set the header bidding code on the website. The browser sends the request for bids simultaneously and the highest bid wins.
In the server-side header bidding, the ad server sends the bid requests, not the browser. This method is also called server-to-server header bidding.
4. Is Google Ads an Ad Exchange?
Google developed Google AdX, which is an ad exchange network, that offers real-time bidding on ad spaces. It offers inventory to ad networks including their own AdSense, agencies, and demand-side platforms.
5. Does Google use header bidding?
In general, Google doesn’t use header bidding technology on all its products. It is, however, available in Google Ad Manager 360.
1. What’s the difference between header bidding and pre-bidding?
In header bidding, the demand partners are contacted before the request is sent to the ad server. Prebid is another term for header bidding, where the demand partners compete for the ad before the ad server sees the impression.
The post-bid model, allows the publisher’s demand sources compete in one auction based on a price after the server declined to choose a direct sell.
2. What is the difference between header bidding vs. waterfall?
In the waterfall model, the system offers the ad space to the first demand partner, if the price doesn’t match, then the second, then the third, until it finds a higher bid than the previous one.
The header bidding model offers the ad space to all demand partners at the same time and choosest the highest bid of all.
3. How many types of header bidding are there?
There are two main types of header bidding: client-side and server-side.
In the client-side header bidding model, you set the header bidding code on the website. The browser sends the request for bids simultaneously and the highest bid wins.
In the server-side header bidding, the ad server sends the bid requests, not the browser. This method is also called server-to-server header bidding.
4. Is Google Ads an Ad Exchange?
Google developed Google AdX, which is an ad exchange network, that offers real-time bidding on ad spaces. It offers inventory to ad networks including their own AdSense, agencies, and demand-side platforms.
5. Does Google use header bidding?
In general, Google doesn’t use header bidding technology on all its products. It is, however, available in Google Ad Manager 360.
How CodeFuel Helps Marketers Maximize the Yield with Header Bidding?
CodeFuel is a monetization platform geared to maximize the revenue for publishers, and header bidding is one of the keys of its success. By increasing the competition among bidders, it ensures only the true highest bid gets the ad space. To achieve that, CodeFuel leverages machine learning and artificial intelligence technology. If you want to know more about how CodeFuel maximizes the monetization revenue for digital properties, request a demo today.
