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Header Bidding, what is it? Who does it help? Why do you need it?

Header Bidding, what is it? Who does it help? Why do you need it?

Publishers use Header Bidding to allow direct bidding on their ad units. In doing so they can conduct their own “private” auction and find the best price for their inventory. This happens at the beginning while the page is loading.

Why is header Bidding necessary?

First let’s understand how ad serving works. Keep in mind that all this happens in a fraction of a second. Usually when a page is loaded it sends a request to the ad server asking for ads. What happen next is very interesting.

The most common used ad server is Google’s DoubleClick for publishers – DFP. Inside the DFP, the first ads go to direct deals and Sponsored ads which are sold straight from the publisher. What is left after that goes to networks and Google Adx / AdSense. This is where the bidding starts and what is called a waterfall. Inside the waterfall, the first network gets an option to bid, all the un-sold inventory get passed back to the second ranked network and so on. Most publishers choose a setting in the waterfall (dynamic allocation) that gives Adx or AdSense the opportunity to outbid any of the winning bids in the waterfall. Publishers choose this setting because it gives them 100% fill rate for their ads.herader bidding

The main problem for the publisher is they don’t capitalize on their ads worth. There is no transparency inside the DFP due to Google’s regulations. Except for Google, no one can see the whole chain inside the DFP. Furthermore, if a network chooses to passback ads, the publisher needs to create a second look and a third look and so on. This can create latency but most importantly the ad value goes lower on each passback.

The problem is not only on the publisher’s side. Advertisers are not happy too. They are not getting a chance to win good ad inventory. This must do with the fact that they are not ranked high enough on the waterfall. Even if they are willing to pay a higher CPM they just don’t get a chance to bid. Even the advertisers that do get a chance to bid, Google can outbid them.

How does header Bidding fix the problem?

Header bidding, to put it simple, levels out the playing field. It creates a public auction before the DFP is in play. Header bidding networks are able to see all players and all bids. This creates competition and in return raises the CPM giving the publisher higher ad revenue. This eliminates passback and each winning bid must take every impression he bid on. Advertisers on the other hand get a chance to win the best ad inventory.

What happens next?

Google is claiming that header bidding slows down the loading of the website, and that it lowers their yield. They are constantly looking for ways to beat the header bidding process. They are releasing features that compete with header bidding: there was DFP “first look” offering a first look at all impressions offered. The latest is exchange bidding – it is in beta – it is sort of an early bidding inside the DFP.

In conclusion, I believe the best way for publishers to maximize their ad revenue is by applying both features on their website. It is a very fine process finding the right balance between the two. Each website is different then the other, therefor, it needs different attention.

Check out these five highly recommended Networks you can use in your Header Bidding:

  • Openx – They run one of the unparalleled programmatic markets globally and can provide publishers access to the first-rate advertisers. They run the largest independent ad exchange. Moreover, their bidder is one of the leading header bidding solutions that publishers are using nowadays. openx.com
  • DistrictM – is a digital technology company that provides unique solutions for Publishers and Advertisers. For the supply side, they have developed proprietary products designed to increase revenue streams from digital ad inventory. On the demand side, they specialize in unique campaign management. Their exclusive and proprietary Technology is able to segment data and user profiles helping targeting users in a most officiant way. districtm.com
  • AOL – is a global media and technology company, they provide premium content and innovative technology. Today, AOL utilizes its four pillars of video, mobile, ad technology and platforms, and open ecosystems giving solutions to advertisers and publishers as one. Aol.com
  • Pulsepoint – It’s programmatic exchange offers a unique demand and flexible integrations through their API. Whether you’re a publisher, advertiser or tech partner offering standard ads or branded content, PulsePoint’s programmatic platforms distribute and optimize it all. pulspoint.com
  • Sovrn – offers complete suite of advertising tools for display, mobile and video. From header bidding to VPAID and VAST video, OnScroll InView ads and cross-platform content distribution. Their support team are always happy to help with ins and outs of header bidding and how to set up your waterfall to the latest on social media platforms. sovrn.com
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About Eyal Lapidot

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