What is Header Bidding and what advantages does it offer?

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Header Bidding is the dynamic evolution of the classic waterfall model in the automatic auction trading of advertising space. The advantage of the so-called sell-side technology lies in the real-time query of advertising space. Publishers can use header bidding generate higher advertising revenueswhile advertisers benefit from greater transparency and more precise control of playouts.

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The Basis - Programmatic Advertising

The classic waterfall method, as it Google for example, and header bidding are methods of programmatic advertising: software-based, automated auction trading. Publishers with well-frequented pages and many advertising spaces automate the allocation of advertising space and playing out on their so-called inventory. With the help of the Target group targeting ads are shown only to customers whose online behavior is in line with a Interest in the product or the service suggests.

Difference waterfall model and header bidding

In the waterfall model, publishers offer their advertising space sequentially. They start with the most lucrative sales channel. If no buyer is found, the offer goes to the second best channel, and so on. The automated query runs until the advertising spaces are successfully sold. Through a so-called Inventory prioritization a limited number of impressions are visible for certain buyer groups, which is detrimental to transparency and restricts the options for targeting ad placements.

With growing criticism of the inefficiency of the waterfall model, the idea of header bidding was added to programmatic advertising in the US market. The process is based on the technology of pre-bid tags. They are called up when the website is loaded and initiate the allocation of advertising space.

By simultaneously switching multiple SSPs (supply-side platforms), different marketplaces or exchanges can contact the publisher's profile.

If the profile and target groups match your own advertising strategy, the DSPs (demand partners) take part in the auctions for the allocation of ad impressions. Ad impressions that do not find a bidder are managed by the ad server and filled with ads from deposited campaigns.

Header bidding consists of the following steps, which in practice are automated and run in real time:

  • Installation of a wrapper (Javascript code) in the header of the website (hence the name header bidding).
  • Sending ad requests to all linked exchanges or marketplaces
  • Receipt of offers for the advertising space
  • Award for the highest bid
  • Forwarding to the ad server where a directly booked campaign is already located
  • renewed bidding process between new offer and booked campaign
  • Award for highest bid
  • final allocation of the advertising space

What sounds simple in theory is a complex and technically demanding undertaking in programming practice. Open source solutions - such as Prebid from AppNexus - make it easier for publishers to use the technology and provide header bidding wrappers that can be integrated into the header on the publisher side without much effort.

Advantages of header biddings

The aim of header bidding - in addition to efficiency gains - is to better monetization of inventory for the publisher, which is to be achieved by connecting as many Exchanges as possible. High demand results in rising auction prices and a higher CPM (price per thousand contacts), which has a positive impact on revenues.

Benefits such as increased efficiency can be achieved through header bidding.
Benefits such as increased efficiency can be achieved through header bidding. (Image: blog.hubspot.com)

At the same time, advertisers benefit from a higher transparency and have the chance to tailor impressions more precisely to target groups and insertions.

High-quality ads are an important prerequisite for successful online marketing.

Of great interest for advertising companies are the initial overlays that are displayed when a web page is called up. They excite the highest attention and achieve the greatest advertising effects - especially if customers have already visited the website or online store of the advertising company and shown concrete interest. Targeted advertising for services, products and services can encourage interested parties and existing customers to visit the company's website or online shop. Continue your own customer journey.

Technical challenges in header bidding

Publishers run the risk that the performance and speed of their own website will suffer if the wrapper is not integrated properly or if there are problems with the coding. This possibility exists especially if header bidding is set up on the client side according to the following steps:

  • Calling the website URL via the browser search line
  • Execution of the wrapper (Javascript code) included in the header when the web page is loaded.
  • Triggering of the auction and acceptance of the highest bid
  • renewed competition between auction winner and direct campaign on ad server
  • in turn acceptance of the highest bid
  • Playout of the advertising content on the purchased advertising space

The use of header bidding is increasing among German companies.
The use of header bidding is on the rise among German companies. (Image: bvdw.org)

Since all auction processes called up by the wrapper take place in the user's browser, a large number of interested parties and bids for advertising space can lead to long loading times and delays in building the website. There is an increased risk that impatient visitors will leave the page and the bounce rate will increase.

To work around the problem, it is possible to perform header bidding server-side. All auctions take place on a intermediate server with high performance takes place, which Makes loading times calculable. Delays are in a range that users do not notice when loading the website.

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Conclusion - Performance optimization through header bidding

With technically flawless integration and fast loading times, header bidding has major performance advantages over the classic waterfall method. Publishers have the opportunity to assign their advertising spaces to a to offer a larger number of advertising companies and, as a result, achieve better auction prices and revenue growth by increasing demand. Companies benefit from a greater transparency, more precise control options for bookings and a Comprehensive overview of auctions and advertising space costs.



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