What Is Header Bidding And Why Should Publishers Use It?
In programmatic advertising, Header bidding is widely recognized as the most effective auction type to increase your website revenue.
Let’s look in context why header bidding is the most commonly used auction type in programmatic advertising.
Our cutting-edge PROP header bidding platform streamlines the header bidding process, making it seamless and efficient for publishers.
What Is Header Bidding?
Header bidding is an advanced auction technique that allows publishers to offer ad inventory to multiple demand sources (Ad exchanges, Supply side platforms) simultaneously before making a call to their ad server. Here’s how it works:
- Publishers place a header bidding wrapper on their website, which sends bid requests to multiple demand partners or ad exchanges.
- Demand partners submit bids in real-time, and the highest bid wins the auction. The winning bid is then sent to the publisher’s ad server to compete against publishers’ direct sold booking and if the winning bid is still the highest bid the ad is then served to the user.
- Header bidding technology allows publishers to sell their inventory at the highest available price point at all times
Advantages of header bidding
- Increased competition: Header bidding enables publishers to access a broader range of demand sources simultaneously, including both premium and programmatic buyers. This increased competition can lead to higher yield in ad revenue.
- Better yield optimization: Publishers can maximize their revenue by receiving bids from multiple demand sources allowing every bidder to compete on merit.
- Reduced latency: Header bidding reduces latency compared to traditional waterfall setups, as it bypasses the sequential ad calls. This results in faster page loading times and improves user experience on site.
Waterfall
Waterfall isn’t as common now with the popularity of the header bidding solution. The waterfall auction is a sequential process where the publisher offers its ad inventory to demand sources in a predetermined order until an ad is sold.
Here’s how Waterfall works
- Publishers start with a primary demand source, typically an ad network or direct sold campaigns.
- If the primary source does not fill the inventory, the publisher moves down the waterfall, offering the inventory to the next demand source until an ad is successfully sold.
- Demand sources are prioritised based on historical performance, revenue share agreements, or other factors determined by the publisher.
Advantages of Waterfall
- Simplicity: Waterfall setups are relatively straightforward to implement and manage.
- Control over demand sources: Publishers have control over the order in which demand sources are called, allowing them to prioritise specific partners or direct campaigns.
Disadvantages of Waterfall
- Limited competition: Waterfalls operate sequentially, which means demand sources lower in the waterfall have fewer opportunities to bid, resulting in potentially lower revenue for publishers.
- Latency: Sequential ad calls can introduce latency as each demand source needs to respond before moving to the next one, potentially impacting page load times.
Real-Time Bidding (RTB)
RTB is a form of programmatic auction where ad impressions are bought and sold in real-time on an individual basis. In reality RTB is used as part of a header bidding platform meaning its best components are used to create a hybrid model with header bidding.
How does Real-Time Bidding work?
- When a user visits a website, an ad impression becomes available for auction.
- Ad exchanges or supply-side platforms (SSPs) send bid requests to multiple demand-side platforms (DSPs) or advertisers.
- DSPs analyze user data, contextual information, and available targeting options to submit bids for the impression in real-time.
- The highest bidding DSP wins the auction and their ad is served to the user.
Advantages of RTB
- Efficient and dynamic: RTB enables real-time decision-making, allowing advertisers to target specific audiences and optimize their bids for maximum effectiveness.
- Increased transparency: RTB auctions provide visibility into bid and pricing data, allowing advertisers to make more informed decisions.
- Access to a wide range of inventory: RTB allows advertisers to access inventory across multiple publishers and ad exchanges.
Disadvantages of RTB
- Limited control for publishers: Publishers have less control over the specific ads that appear on their websites as the auctions are determined by the DSPs.
- Potential for lower CPMs: Increased supply
Header Bidding With PROP
Having been established for many years, we understand the environment and what it takes to execute effective programmatic advertising. PROP excels when our proprietary technology comes into play; our cutting-edge header bidding platform streamlines the header bidding process, making it seamless and efficient for publishers.
PROP integrates with multiple demand partners, including premium ad exchanges and networks, ensuring maximum demand exposure for publishers’ inventory.
Why is it advantageous to use PROP for header bidding?
- Implementation complexity: Setting up and managing header bidding can be complex and requires specialist technical expertise. PROP has simplified this process by implementing the technology using a single line of code on your website and we will take care of the rest.
- Page load times: Header bidding can reduce latency compared to waterfalls, but if not implemented properly it can contribute to slower page load times.
- We take the stress away from continual optimisation of header bidding technology by constantly optimising our implementation based on industry trends allowing you to focus on improving your business.
The PROP team is always testing and improving our product offering based on industry trends. This allows users of our technology to benefit from latest updates and improvements to the technology and helps stay one step ahead of your competitors.
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