What is Header Bidding?

While much of programmatic advertising is automated, there are still many aspects of online advertising that are inefficient. One new way to combat these inefficiencies has been developed called header bidding. This cutting-edge ad technology is bringing more competition to the table and showing good signs for both publishers and advertisers.

Header bidding, also known as advance or pre-bidding, is an advanced programmatic technique. It allows publishers to show inventory to multiple ad exchanges at the same time. Average ad-serving technology sends an impression to one group of advertisers to be bid on. The unsold impressions are passed on and on, then sold for a winning bid. This creates a second-price auction. In a second-price auction, bidders do not know what other people have bid. The highest bidder wins, but the price paid is the second-highest bid price. This auction limits your ceiling based on who you’re selling the inventory for, and what the set price is.

With header bidding, multiple groups of advertisers are given the chance to bid on an impression at the same time. This gives publishers more control over their ad space, and generally higher purchase prices.

As supply-side partners exist currently, there are a lot of fragmented demand sources. Header bidding levels the playing field so that an impression isn’t seen by only one demand source. Multiple demand sources are able to see and bid on the same impression at the same time. Essentially, this allows publishers to conduct direct auctions and pair their impression with the best possible advertiser.

With multiple exchanges bidding on the same inventory simultaneously, more advertisers have the chance to bid on an impression. Bringing more advertisers to the table means:

  • more competition
  • higher purchase price
  • higher quality ads

Header bidding also reduces the number of unsold and remnant ads. More demand means more chances of supply being paired with the right advertiser. The process of header bidding is more streamlined than average ad-serving technology, not limiting an impression to be seen by only one exchange. Technoarti CEO Shani HIggins said:

“The entire idea of this system is to eliminate the need for pushing inventory back and forth, which is inefficient and wasteful.”

Header bidding works by placing the JavaScript code in the website’s header. When a webpage loads, the code calls out to ad exchanges or supply-side partners (SSP’s) for bids on the impression. The bidding happens simultaneously, instead of one-after-another like with waterfalling or stacking technology. This creates a win-win situation for advertisers and publishers. Advertisers get access to the best inventory, and publishers get access to higher paying, higher quality ads.

One common theme brought up when discussing header bidding is page load time. Jonathan Bellack, Google’s director of product management, is concerned that pages will load slower because of all the data that is being processed simultaneously. However, not everyone agrees that header bidding causes pages to load slower. Our data has actually shown a 40% faster load time using header bidding.

Header bidding is also providing benefits to advertisers. Without header bidding, advertisers are limited in the inventory they see because some inventory is sold in direct deals and in private marketplaces. However, with header bidding, advertisers can see all of a publisher’s inventory. This gives advertisers a better chance to win bids on premium inventory, like on the homepage of a website.

Monumetric recently introduced header bidding technology to all its publishers. After implementing header bidding, Monumetric publishers saw revenue increases of 30 400%! Many publishers were seeing Q4 revenue in Q2 (it was like Christmas in April!). A significant increase happened almost immediately, but our team is continually optimization and making daily improvements get the most out of this technology.

Header bidding is certainly making waves in the world of digital advertising. Advanced ad-serving technology is making it possible for higher purchase prices and higher quality ads being available for publishers. The tech is still evolving, but it’s definitely providing better opportunities for both publishers and advertisers.

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