What do you need to know about header bidding technology?
In the summer of 2015, AdExchanger published an article covering a new technological approach to selling online advertising, which allowed servers to receive ads from partners before the full load of the web page.
It was the first header bidding coverage in the media. Although the technology has been operating since 2009 and has gone through several stages of modifications since then, many participants of the programmatic market still wonder as to the meaning of it.
The popularity of header bidding is rising globally. Last year 75% of the websites that monetize ads featured in top-5000 Alexa ratings implemented header bidding technology. Understanding this new automatic model of advertising purchase inner workings gives an undeniable advantage on the market. We are hereby proposing to tackle the operating principles of the pre-bid auction utilizing which publishers will be able to increase their inventory sale revenue on average by 30%. At the same time, advertisers will have a chance to work directly with publishers and buy more relevant ad traffic.
What is Header Bidding?
Header bidding is a technology that allows publishers to hold an advance auction of the ad inventory on their platforms in real-time. It does so by letting them accept multiple bids from advertisers simultaneously before the request reaches the ad server. Upon the auction completion, publishers choose the buyer who offered the highest СPM rate. Afterward, a response is sent to a page, and the auction’s winner uploads the media on the relevant ad slot.
In order to figure out how the pre-bid auction works we suggest taking a look at the traditional “waterfall” model.
Publisher “waterfall” model
During this process, a seller (publisher) offers ad impressions to the list of buyers (ad networks) for a predetermined minimum price per viewing called floor bid in a sequential manner. Publisher arranges a call during which all ad networks are surveyed for a potential price they are ready to pay per impression (CPM). The first sequential buyer ready to pay the requested price will get the impression.
The waterfall model’s success depends on the adequate calibrating of several configurations such as the number of calls, the ad networks priority, and desired CPM for each buyer, while taking into account OS, GEO, and other factors. The key is to balance between the volume of calls and the potential CPM range without losing efficiency. If the price per impression is too high – the ad space will not be sold; if it is too low – the publishers will not get the best possible offer.
Such a hierarchical model of online advertising sales has major disadvantages. Ad networks with low priority for participation in the auction can fail to reach the bidding stage, even though they are potentially willing to pay higher figures for the impression. The lead in the bidding belongs to the client who made the first offer of the price higher than the floor one. Subsequently, it does not help the publisher to squeeze the maximum profit from each impression. Additionally, as a result of passback tags that are happening in each transaction, the load of the page can get significantly stunted, which in turn affects user experience.
How does header bidding technology work?
Header bidder technology simultaneously accepts bids from several DSP (Demand-Side Platform), SSP (Supply-Side Platform), and ad networks in the real-time mode. All bidders have equal chances of purchasing the ad slot, but the winner is the one who offers the highest CPM. Advertisers gain access to all of the inventory at once, including premium placement, which would be attainable only through the direct deals within the “waterfall” model. Customers receive all available impressions for which they can propose a competitive bid. Therefore publishers know the price that partners are ready to pay right away. In turn, advertisers can choose ad spaces most suitable for their targeting.
Real-time in an advance auction is carried out with the help of Java-script code unique to each publisher and embedded in the website’s header. When the user is loading the page, the code concurrently sends the request to all partners connected to the publisher. As soon as the maximum bid is determined, the impression gets sent to the publisher’s ad server, and the creative content of the winning bidder appears on the ad slot. This whole process takes around 500 milliseconds and enables the user to experience the unhindered content flow.
We have provided some comparative examples of both models’ inner workings below:
2021 Header bidding trends
Pre-bid auction development trends are set by the ad tech companies that are constantly working on technology improvement and are coming up with new solutions. In 2020-2021 the following technical solutions are relevant:
1. Header Bidding Wrapper
This is a unified framework that streamlines all publishers partners’ ad features and is responsible for holding the real-time auction between them.
2. Server-side header bidding
Auction in the header of the website is happening in the web browser (client-side). When a publisher offers inventory to many advertisers, a container with several codes simultaneously launches numerous JavaScript processes that slow down the load of the web page. Alternative auction hosting on the external publisher’s ad server (server-side) allows accepting all requests from DSP and SSP partners thus facilitating the page’s operating speed.
3. Header Bidding platform
This is a relevant solution for publishers that aim at increasing the volume and price for traffic acquisition by advertisers, making it into a unified platform customized for the business objectives. Adtelligent Header Bidding Platform enables to hold all of the pre-bid auctions at the same time via web-browser, server-side or by implementing both approaches. It provides a boost for ad inventory sales income and detailed reporting for effective media buying optimization. Moreover, publishers can offer their own inventory on the auctions with Adtelligent Marketplace, Google Ad Manager advertisers (Adsense, Ad Exchange or Open Bidding), and Unified Ad Marketplace by Amazon, which ensures the maximum profit for each impression. The platform also supports native advertising and all video formats, which are the most valuable publisher’s assets.
You can see the examples below:
What benefits does header bidding have?
Header bidding drastically alters the approach to online advertising sales and makes the whole programmatic process much easier. New technology solutions permit publishers to build mutually beneficial relations with the customers.
Advantages for publishers
- Header bidding grants publishers an opportunity to work directly with DSP companies and partners, bypassing SSP and other mediators, which in turn creates more transparent work mechanics.
- Advance auction furthers an honest competitive environment for all bidders. Thus publishers can evaluate their inventory value and increase the advertising revenue by 30%, in contrast to the traditional model.
- This technology helps to reduce the number of passback-tags and improve the web-page load speed since the request for the ad server happens only once after the advertiser was determined.
- With the help of header bidding technology, the publisher can hold parallel auctions with a large amount of advertisers without burdening the page load while also receiving the highest bids for traffic purchasing.
Advantages for advertisers
- Advertisers receive direct access to publishers, avoiding long chains of resellers.
- They can access the full ad inventory and the remnant traffic left from the previous bidding as it happens in the “waterfall” model.
- Buyers can claim the premium inventory, offering the highest price for it, and are guaranteed to receive the purchase right.
- Loading of the web pages happens immediately, which is essential for both an advertiser and an Internet user who sees the content.
We are observing the new wave of header bidding wrapper solutions, which grant publishers opportunities to boost their profits and manage programmatic advertising auctions by implementing the required tools; the technology also allows brands and advertising agencies to gain direct access to quality traffic. If you also want to increase your online advertising revenue, register for free at Adtelligent Header Bidding Platform and start monetizing your digital resources efficiently.