Header bidding
Digital advertising is all about balance. Advertisers have become more selective with where they choose to run campaigns while publishers seek to offer their inventory to as wide an audience as possible. How can publishers ensure that their inventory is available to enough buyers, and furthermore, how do they ensure that their yield remains competitive?
This is where Header Bidding comes into play. Our team of knowledge experts on Kargo’s Publisher Partnerships team have created this go-to guide to help you understand the basics of Header Bidding.
WTF is Header Bidding?
In its simplest form, header bidding is a method for publishers to monetize inventory via an auction that will often occur within the header (the literal top section) of the web page. In order to ensure the highest yield possible, publishers often load their header with multiple partners (ad exchanges) to bid for their desired inventory.
How it Works:
A publisher’s request logic initiates the bidding process. Within a matter of milliseconds, publishers offer impressions (their “supply”) to multiple ad exchanges simultaneously before making calls to their own ad servers (the most common being Google Ad Manager, also referred to as GAM). Each partner bids for their preferred inventory based on their specific deal or campaign (the “demand”). The partner/exchange with the winning bid pays the publisher the clearing price and is responsible for filling the chosen ad space.
Prior to the adoption of header bidding, publishers would manually assign partners monetization priority within their ad server in a process referred to as the “waterfall.” At the top of the waterfall were direct orders, which guaranteed first look at a certain number of impressions to a designated demand source. As unsold impressions were passed down sequentially to the next party on the list for purchase, the value of the impression diminished, as reflected in the asking price.
By contrast, header bidding allows multiple ad exchanges to showcase their highest bids to the ad server. From that point, the ad server can compare these bids to the publisher’s direct buys and then choose the winning bid. Winning bids determine which campaign creatives serve into which ad slot.
Header Bidding Benefits
Revenue
Increased revenue yield, aided by increased competition, is a clear benefit of header bidding since the highest bids from each demand partner joust for the winning price.
Transparency
With this higher revenue also comes more transparency, as publishers have purview into demand sources bidding on their inventory and the prices they net.
Types of Header Bidding Solutions:
As a publisher, there are two types of header bidding avenues used to monetize inventory:
Server-side header bidding
Client-side header bidding
In server-side header bidding, requests are sent from a central server, while client-side header bidding occurs in the browser. By occurring in the browser, client-side header bidding maintains the risk of page load latency -- the more exchanges integrated, the more potential there is for slow load times that muddle the user experience. Server-side addresses the latency concern, but one con for publishers is lack of transparency, since the auction process is hidden on the server. Additionally, server-side header bidding is unable to support cookie matching because data can be filtered out when moved to a server. Publishers are able to run both server and client-side or choose between the two methods based on their individual strategies and preferences.
What’s a Header Bidding Wrapper?
Say that out loud three times. Yep, “header bidding wrapper” is hard to say and nearly as hard to explain. But it’s a vital piece of publishing technology that has advantages for publishers looking to streamline their auctions, advertising looking for fair bidding environments and consumers who just want their pages to load faster without banner buffering
OK, so what is it? A header bidding wrapper is a Javascript tag that resides on the publisher’s webpage to run the header bidding auction by generating bid requests, collecting all the bids, and communicating them to the ad server.
How Does the Header Bidding Wrapper Work?
There’s a long, techie version, but we’ll stick to the basics:
A user requests a web page
This triggers the header bidding wrapper to signal that it’ is open to accepting bids
Demand partners respond with their bids to serve their impression
The wrapper sends the collected bids to the ad server
The ad server makes its final decision and serves the winning ad
Benefits of a Header Bidding Wrapper
Fair and fast
The wrapper provides an equal opportunity to all demand partners to bid. By randomizing the order of calling the demand partners and collecting all bids simultaneously, the wrapper creates an unbiased auction environment. A unified auction environment means the user doesn’t have to wait for ads to load on screen before the website’s content begins to load.
Simplified Demand Partner Management
Quickly and easily add, remove, or replace demand partners in the header bidding wrapper without having to make edits to code or the page.
Setting Universal Timeout
A timeout requires that all demand partners return their bid in a specified amount of time and disqualifies any bids that can slow up the auction and ad delivery.are returned too slowly from the auction environment. This reduces latency and provides a better experience for the end user.
Real-time Analytics
A header bidding wrapper allows publishers to set up real-time reporting capabilities of their auction’s and demand partners’ performance and demand partners. Publishers can report on win rate, bid rate, and timeout rate for each of their demand partners. Not to mention real time monitoring of ad revenue and CPM.
Price Control
The header bidding wrapper enables publishers to set auction floor prices. The price floor is essentially a baseline amount that determines who gets to bid on your inventory. Think of setting a price floor as the “price to beat” for partners to win the auction.
Easier consent process
The wrapper allows publishers to collect user consent and pass it to the bidders with less technical complexity and potential for errors.
That’s a lot of upsides, but what about the downsides of header bidding wrappers? There’s really just one, but it’s a big one: it takes deep technical know-how to set up the wrapper. Incorrect configurations can impair your auction and impact page loading speeds. Depending on your technical capabilities, you may have to turn to a specialized header bidding solution vendor, which of course comes with a price tag. However, given the returns a header bidding wrapper can deliver in terms of auction ease, speed and profitability, it’s likely worth it.
Many of Kargo’s premium publisher partners have adopted this technology for their own websites. Still confused or unsure what may be the best fit for your website? Feel free to reach out to us and someone from our Pub team will be more than happy to help!
Looking forward:
Header bidding has come a long way in automating and improving publisher monetization strategies. It’s a mechanism that is constantly evolving as publishers seek to balance control over their inventory and user experience, along with the transparency to exchanges to scale their programmatic revenue. PreBid.js, Index, Amazon’s Transparent Ad Marketplace and Google Exchange Bidding have all emerged as reliable solutions to the digital publishing community’s quest for the perfect system. We look forward to seeing how the processes continue to evolve.
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