What is Header Bidding and How Does It Work?

What is Header Bidding? [Definition]

Header bidding, also known as advance bidding or pre-bidding, is an advanced programmatic technique where publishers offer inventory to multiple ad exchanges simultaneously before making calls to their ad servers (mostly DoubleClick for Publishers). 

Yieldbot CEO Jonathan Mendez said that, ‘Header bidding is a much cleaner and better tech integration between revenue partners, ad tech companies and publishers compared to what’s going on currently’.

History of Header Bidding

Header Bidding a programmatic software has changed overtime with response to the need and dynamics of the digital advertising ecosystem. In early 2010, which is supposed to be the pre header bidding era, is usually considered traditional for the ad selling inventory with a waterfall model where the Impressions of an ad was offered to the demand partners and each partner shall have a probability to chance the bid. 

In the year 2014 header beating was introduced as an alternate option to the waterfall model. This allowed multiple demand partners to bid simultaneously before the ad server call. 

There came a rapid Adoption in 2015 when publisher and ad tech companies adopted header bidding and increased its potential to create a competitive auction environment. 

Thereafter in late 2010 the advertising bureau introduced open RTB 3.0 specification, which included support for header bidding to standardize certain aspects of header bidding which made it more accessible. 

Seeing the current status this industry has explored advanced header bidding technique such as bid catching and bid shading, that further enunciate the efficiency and the revenue by providing many solutions like server to server connection, supply-path and Optimization. 

What is Open Bidding?

Open Bidding is also called ‘Exchange Bidding’ and is a kind of solution which is offered by Google ad manager that simplifies the process of selling ad inventory for publishers by allowing multiple ad exchanges to fight in an auction. 

Open bidding has a simplified management where publishers are able to manage their ad inventory more efficiently within the Google ad manager interface. It offers a wide range of partners where publishers will also get access to diverse demand sources that help to maximize the opportunities and monetize their ad inventory. Open bidding is truly specified with Google ad manager whereas header bidding comes as a more generic term which refers to a technique used across various Tech platforms and solutions. 

How Header Bidding Works?

Here is the working profile of Header bidding: 

• In the first case the publisher gets to paste the code of header bidding on the page. 
• After visiting the site The wrapper will make an ad call to the demand partners. 
• The demand partners will then Submit their bids. There is always a time frame in which the bidders should respond so that the page latency must be prevented. 
• The wrapper will then proceed and send the bid to the publisher ad server. 
• Finally the highest bidder will win the real time auction and the creative will be displayed on the publishers page. 

What is Header Bidding in Advertising?

It will allow the publisher to offer the Inventory of the ad to multiple ad exchanges before making a call to the ad server. It enables a simultaneous and competitive auction environment and works as a brilliant initialization, simultaneous auction with responses and ad server calls. 

When it comes to the advantage of header bidding it increases competition, improves transparency and the potential for higher ad revenue for the publishers. If compared with the traditional method of waterfall where ad Impressions are offered to one ad exchange at a time the header bidding has gained immense popularity as it offers multiple ad exchanges. Hence, it creates a more efficient and a competitive environment which benefits both the publishers and the advertisers. 

Waterfall vs. Header Bidding

Header Bidding and waterfall both are used in the digital advertising for selling up the ad inventory and maximizing the revenue but they share a different way of operation. 

• While using the waterfall the ads are requested to be sent sequentially to the different ad networks. It is a process where the subsequent and network get a chance to fill the impression if the previous one fails. 
• Header bidding is a step ahead from a traditional approach that allows the advertiser to bid on the impression in real time where the highest bidder will win and provide the maximum possible revenue for the publisher. 

How to Setup Header Bidding?

For setting up a header wedding you need to understand and determine the platform where you want to implement and then select the wrapper that suits your need. You need to integrate the wrapper into your website or app and then configure by setting the parameters such as time out, floor prices, values and ad unit information. 

You need to work closely with your demand partners and stay informed regarding the industry Trend and updates adhering to compliance and privacy. 

Essential Factors to Keep in Mind During Header Bidding

If you want to implement successfully the header beating there should be few considerations to keep in mind:

• Ad Server Latency

• Timeout Settings

• Partner Selection

• Ad Quality

• Wrapper Management

• Ad Fraud Prevention

• Mobile Optimization

• Testing and Optimization

What is Header Bidding in Programmatic?

In programmatic advertising technique header wedding is designed to optimize the sale of online Ad impression in real time in this the ad Impressions get option of in a structure of a waterfall. The art inventory is offered to multiple exchanges or networks in a sequential manner. Therefore it has become a widely adopted practice in programmatic advertising as it offers a more efficient and transparent way to transact the ad inventory in the real time auctions. 

What is In-App Header Bidding?

In app header bidding is in the context of mobile applications and it lets the developer of the application and its publisher to create a competitive and efficient auction environment for the industry. By the help of in app header beating the ad inventory can be sold to the publisher in real time. 

What is Video Header Bidding?

Video header beating is a kind of technique of advertising that extends to the digital advertising system. This has lately got the approval from the tech industry as the popularity and demand is rising. Everyone including the publisher and the advertiser have become interested in the video advertisement as it gives a potential and an extent of engagement increasing revenue. 

The advancement of Technology video header bidding is taking its own place. 

Mistakes to Avoid in Header Bidding

Implementation header bidding is a powerful strategy for maximizing ad revenue, but it is important to avoid certain mistakes to ensure a successful implementation. 

• Too Many Header Bidding Solution Providers: With many of the header bidding providers. While multiple demand partners increase competition it too affects page latency. 

• Too Many Bidders: There should not be inclusion of multiple ad exchanges in the header bidding set up. 

• Inadequate Server Capacity: This generates a lot of request and stresses publishers a lot. 

• Not Optimizing  Timeouts: Timeout values shall balance the number of bids. 

• Not Monitoring To The Performance: The regular monitor of the header bidding setup certain the effective running of the setup. 

Too Many Header Bidding Solution Providers:

There are certain mistakes that you should avoid while using a header bidding implementation. 

Too Many Bidders: header bidding provides you with too many bidders. Hence, there might be a risk that you may put the impression on the sale for the second time with confusion to the same buyer and this will lead to duplicacy. 

Inadequate Server Capacity: header bidding sometimes turns out to be a stress for the publisher as it generates plenty of requests. 

Not Testing the Setup: publisher has to test the setup of header beating ensuring the working and promptness. 

Not Optimizing Timeouts: time out Optimization is important in header beating and not optimizing it can lead to several negative impacts that considerably increases the latency and User experience degradation. 

Not Monitoring the Performance: the publisher shall on a regular basis examine the performance of the solution and ensure its efficiency. 

What are the Disadvantages of Header Bidding?

Header beading has number of disadvantages and challenges that should be well aware by the advertisers: 

1. It can potentially slow down the page loading time as it has a number of ad exchanges.
2. The maintenance and implementation of it is not easy. 
3. Even though the header bidding aims for latency reduction when compared with the other setups, it fails at times. 

What are the Benefits of Header Bidding for Publishers?

Header bidding comes as a complete guide for the publisher and is a kind of digital advertising technique where they can seek the leverage and with the help of header bidding gets the ability to offer ad and inventory to multiple demand partners and increase their revenue. 

Prior to making the request to the ad server, It also turns out collecting bed on the publisher web page. Hence, this does not restrict the publisher to sell their ad inventory unless the other becomes the highest bidder the whole of this process is maintained very fair and transparent for the Publishers. 

What are the Benefits of Header Bidding for Advertisers?

1. Header beading for advertisers provides you with an opportunity where you can bid for the premium inventory without getting indulged in a direct deal. 
2. Publishers clearly get to share the level of data from the bid with the advertiser as a reference for the bidding decision of the future.

Header Bidding Vs. RTB 

It is a way through which the add inventory can be sold to RTB. 

RTB is an auction based method for buying and selling the ad impressions of individuals in real time. This also encompasses: 

• Waterfall
• Private Auction
• Header Bidding
• Private Auction
• Preferred Deal
• Programmatic Guaranteed

Conclusion

From offering a large amount of benefit, the successful implementation of management to avoid the same fall such as latency and complex setup and Magicbid turns on the table for the same. The Header bidding publishers often use header bidding wrapper or the container for streamlining the process.