What is header bidding?

We couldn’t start our blog with a different topic. In this post we tried to explain what is header bidding and how header bidding can help the publishers to increase the revenue on their website.
header bidding

Introduction to header bidding

We couldn’t start our blog with a different topic. In this post we will try to explain what is header bidding and how header bidding can help the publishers to increase the revenue on their website.

Definition of header bidding

Header bidding is an advanced programmatic advertising technique that allows publishers to simultaneously auction off their ad inventory to multiple advertisers in real-time. Unlike traditional ad buying methods, header bidding provides publishers with a more transparent and fair auction process, resulting in higher ad revenue through higher CPM and higher fill rates.

Evolution of advertising techniques

The following paragraphs will describe mainly a display scenario. But this doesn’t exclude to apply the same concept to video ads as well. For video ads the js ad tags are usually changed for VAST/VPAID tags. The header bidding and the waterfall concept are similar.

Basic single ad network js tags

The most basic advertising solution consists in using ad tags from an ad network. The most common and diffused one is Google AdSense. Placing javascript tags on the website is enough to start showing ads to the users and monetise the pageviews through ads views (CPM model) or through clicks on the ads (CPC model). – other models like CPA and CPL will be described in another article.

The waterfall

The single ad network js tags allow the publishers to start monetising the website immediately and without much advertising or programming knowledge. But one the traffic on the website increase, the publishers should find more complex solution. The natural evolution was the waterfall setup. The waterfall is an old technique that allows to use different ad tags from one or more ad network all together. At the top of the waterfall we should use the ads tags that pay most (higher CPM) and at the bottom of the waterfall we should use the ads tags that pay lowest (lower CPM). The tags at the bottom are also called pass-backs. Usually the ads with higher CPM have a lower fill-rate, limited in the number of views or shown only to certain users or certain GEOs. These pass-backs tags are used to fill the “blank space” when the better paying ads are not showing.

Looking around the internet you will probably read that the waterfall technique is old and obsolete. This is only partially true because it can be still very effective if used together with header bidding. Here is an example of efficient waterfall:

  1. Google Ad Exchange
  2. Other ads tags from an ad network
  3. Other ads tags from an ad network
  4. AdSense or other CPC ads

The waterfall and header bidding setup both require the use of an ad server. The most common used is Google Ad Manager. Why? Because it is simple and is the only to access directly to Google Ad Exchange demand.

At the top we setup Google Ad Exchange. We also setup high floor rates so we push the bidders to pay more to display ads on our website. This is a good technique to avoid the so called bid-shading.

In the positions 2, 3 and so on we should setup ads to serve when Google Ad Exchange ads don’t meet the floors, instead of leaving the space empty (blank). Typically we use js tags from an ad network and typically by GEO.

At the bottom of the waterfall we have to use ad tags from a network which offers fill rates near to 100%. Most of the time this comes with the condition that the CPC offered is 0. These ads usually don’t pay per view but per click or lead generated (CPL model). We can use tags from AdSense here (if we don’t refresh ads) or from other ad networks like Outbrain or Revcontent.

The header bidding

Now we should introduce header bidding in our “old” waterfall. Header bidding will be positioned at the top, together with Google Ad Exchange. Here is an example of efficient waterfall combined with header bidding:

  1. Google Ad Exchange + Header Bidding
  2. Other ad tags from an ad network or AdSense or other CPC ads

With header bidding, publishers offer their ad inventory to multiple demand partners simultaneously, including ad networks, exchanges, and demand-side platforms (DSPs). Most of the ad networks developed prebid adapters or oRTB solution to bid real time instead of simply providing to the publishers ad tags.

How is it implemented? Both configuring header bidding in your ad server (typically Google Ad Manager) and both by adding a code snippet to the header of their website, which allows advertisers to bid on the available ad inventory in real-time.

The process works as follows: when a user visits a website, the website sends a request to multiple ad exchanges to bid on the available ad space. The highest bidder wins the auction and their ad is displayed on the website. This process occurs within milliseconds, ensuring that the ad displayed is relevant and timely.

Header bidding also allows publishers to access a larger pool of demand partners, including ad networks, exchanges, and DSPs. This can increase competition for their ad inventory, leading to higher ad revenue. In addition, header bidding can help reduce the number of unfilled ad impressions, which can be a common issue with traditional ad buying methods.

Types of header bidding

There are several types of header bidding, including server-side header bidding and client-side header bidding. Server-side header bidding involves the use of a third-party server to manage the auction process, while client-side header bidding occurs on the user’s browser. Both types of header bidding have their own advantages and disadvantages, and the choice of which type to use depends on the publisher’s specific needs and requirements.

Overall, header bidding has revolutionized the programmatic advertising industry by creating a more transparent and fair ad buying process. Publishers can now access a larger pool of demand partners and have more control over which ads are displayed on their website. Advertisers can also benefit from the increased competition for ad inventory, resulting in higher quality and more relevant ad placements. As the advertising industry continues to evolve, header bidding is likely to remain a popular and effective way to buy and sell ad inventory.

HeaderBidding.Ai proposed solutions

Header Bidding ai offers to the publishers a wide range of solutions saving publishers the hassle of a very complex setup and the burden of managing multiple contracts and payments with several SSPs and ad network participating in the header bidding auctions.

  • Display Full Solution: we make the complete setup on our ad servers and the publisher simply paste the main script and the tags in the page of the website. All the header bidding setup and the waterfall setup are done by our team. The total daily revenue is displayed aggregated in a dashboard.
  • Display Header Bidding only: we plug HB directly into your GAM account via API and you will need only to insert our wrapper (script) on your website. Depending on the website niche and traffic you can usually increment your revenue by 15% to 50% compared to AdX only.
  • Display Pass-back Solution: if you already have your ads solution, we can occupy a lower position in your waterfall. Setup our tags as apps-back and when your floors are not met, our ads will generate additional revenue instead of displaying white space. This solution doesn’t require any header bidding wrapper (but still performs a real time auction per each pass-back tag setup) and works with your other wrappers as well.

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