It’s no revelation that the programmatic ecosystem is far from perfect, but it’s moving in the right direction and header bidding is certainly helping it get there.
Header bidding is one of many ways publishers are trying to eek out higher yields from their inventory. So what is it?
What Is Header Bidding?
Header Bidding, also known as “pre-bidding” is a technique that a publisher can use to offer its ad inventory to multiple exchanges simultaneously BEFORE making calls to their ad-servers.
This differs from the traditional "waterfall" model in which impressions are sold to exchanges in descending order based on the exchanges perceived value which is calculated by looking at historical yields.
Normally the impression first gets offered to direct deals which tend to yield the highest CPMs. After thi, the impression would get offered to Ad Network/Exchange #1, and if they cannot fill it then it is given to Ad Network/Exchange #2 and so on. This process continues until someone makes a bid, instead of gauging demand in real time like with header bidding.
Publishers say this model leaves money on the table…
Competition 1 – 0 Google
One of the biggest impacts of header bidding is the pressure it puts on Google’s relationship between AdX and DoubleClick for publishers. Publishers who use DFP (which is a lot) can significantly increase yields by enabling “dynamic allocation” which allows AdX to compete for an impression even when it is not their turn.
This is the equivalent of pushing in the front of the queue at a theme park or skipping straight to the £1 million question on Who Wants to Be a Millionaire? This creates a waterfall that unfairly advantages AdX demand and ultimately Google.
Publishers are constantly looking at ways of increasing their yields and advertisers will always want to target a publisher’s best inventory. So although the setup of header bidding can be tricky and there are concerns with increased page load times, thousands of publishers are already seeing the benefits of header bidding and looking to a future filled with ever increasing yields.