For example, in the digital advertising landscape, programmatic advertising has revolutionized how advertisements are bought and sold, using technology to automate the process and deliver targeted, data-driven campaigns. This has only been further compounded by the emergence of ‘Header Bidding,’ which offers a more streamlined and efficient way for publishers to monetize their inventory and for advertisers to reach their desired audience. 

A recent study showed that header bidding led to a 23% increase in fill rate and a 20% increase in average CPM. With these benefits and more, it’s no wonder why header bidding has become a popular and essential tool for publishers looking to maximize their monetization potential.

What Is Header Bidding and How Does It Work?

Header bidding, or pre-bid or advanced bidding, is a programmatic advertising technology. It is a real-time programmatic auction where multiple demand partners bid on a single impression. 

Header bidding allows publishers to offer their ad inventory to multiple SSPs (Supply-Side Platforms), ad networks, and ad exchanges to bid before sending the bid call to the ad server. This results in a more competitive and transparent bidding process, as demand sources compete against each other for the same inventory in real-time.

Behind the Scenes:

Header bidding works by incorporating a JavaScript code snippet into the header of the publisher’s website. So, when a user visits a page, this JS code sends out an ad call to all configured demand partners to bid on the available ad units. While the header auction happens, Google Publisher Tag is paused. Once the bids are received, they are sent to the ad server for the second auction round. Based on the configuration set by the publisher, the ad server filters out the winning bid and serves the creative on the user’s page. 

What’s interesting to note here is that all these auctions happen while the page loads on the user’s browser. And as soon as the page loads, the aim is to display the ads at the required places. 

Benefits of Header Bidding

Before header bidding, publishers and advertisers relied on the ‘Waterfall or Daisy-Chaining’ method to buy and sell media. In waterfall, a series of demand partners sent ad requests, each given a priority based on their past performance and the estimated value of the ad inventory. So, if a demand partner sitting at level 1 cannot fill the ad request, the bidding call will go to the next bidding partner sitting at level 2. The bid request will keep on moving down until it is sold off. 

As the bid request trickles down the hierarchy, it often results in a slow and inefficient process, with many ad impressions going unsold. Also, as the partners are arranged based on their past performances, it might happen that a bidder who is willing to bid more but is sitting at level 2 or 3 might never get a chance to bid. The method lacks transparency and limits the ability of publishers to earn maximum revenue.

Header bidding evolved as a replacement for the waterfall method and brought great relief to the users as it allowed:

1. Increased competition: Header bidding allows multiple demand sources to bid on the same inventory simultaneously, leading to increased competition and higher CPMs for publishers.
2. Improved transparency: It provides greater visibility into the bidding process, allowing publishers to understand the value of their inventory better and make informed decisions. 
3. Faster load times: Header bidding enables publishers to load bids from multiple demand sources in parallel, reducing latency and increasing the number of impressions served. The bidding happens during a fixed timeframe. 
4. Flexibility: It allows publishers to make real-time adjustments to bidding strategies, enabling them to optimize for specific inventory and respond quickly to changes in market conditions.
5. Better targeting: Header bidding provides more advanced targeting capabilities as publishers can share relevant data with the demand sources in real-time. This, in turn, allows advertisers to reach specific audience segments and helps publishers increase revenue by providing more personalized ad experiences to the users.

How to Set up Header Bidding?

Setting up header bidding can be complex, but it’s worth the effort. The first step involves the integration of a header bidding wrapper, a piece of JavaScript code that is placed in the header of a publisher’s website. The wrapper communicates with demand sources, allowing them to bid on inventory in real-time. Once the container is in place, publishers can integrate demand partners, such as ad exchanges, SSPs, and ad networks. They will also need to configure the settings to meet their specific needs.

Owing to the technical complexity of the setup, it’s always advisable to look out for a header bidding provider. A good header bidding provider will handle the setup, bring in good demand sources, and offer complete transparency. 

Wrapping up

The benefits of header bidding are numerous, and for publishers looking to maximize their revenue, it is an essential tool in their arsenal. By partnering with a trusted header bidding provider, publishers can access the latest technology, expert support, and valuable insights to help them achieve their revenue goals. 

With the right partner, the benefits of header bidding are endless, and publishers can rest assured that they are making the most of their ad inventory and reaching their target audience with the most effective and relevant advertising. 

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Twitter was hot with some great nuggets from the panels.

Kicking it off with the keynote was none other than Emily Riley from Forrester Research. Emily is old school Advertising.com, one of the first delivery managers in the company. She helped pioneer the online education business back in the day with Casey Cook and Mike Peralta. Emily is super sharp and delivered the goods about RTB as well as shared some interesting marketer feedback about their expectations of display performance. If you weren’t there you can download a copy of the research here.

Out of all the panels some of my key take-aways are:

1. It’s small, but growing fast. When people mentioned the number of bids being handled in a day or a month we’re still not talking about large numbers. People realize scale is important and this was echoed across many panels. It’s not efficient to sell six impressions to anyone right now.

2. You don’t necessarily need RTB to get what you need. Much of the performance the demand side platforms (DSPs) are driving aren’t really related to naming your price in real-time. It’s the ability to cherry pick the right impressions based on a data set you choose and you know correlates with performance for you.

3. Someone on the agency panel said something to the effect, “CMO’s eye’s glaze over at the discussion of the technology involved with all of this.” This was in response to whether companies would build and/or run their own DSPs. Since many companies change their agencies every few years, doing it all themselves would require them to change out their marketing team. Not sure a wholesale liquidation of the team will be the most efficient. Operators will be needed to run the DSPs for most advertisers.

4. RTB won’t takeover all of the direct sale business anytime soon – it would be too unpredictable for the buyers and sellers. The advertisers need to spend their marketing budgets and show results. A large portion of this needs to be locked in to ensure the results. Leaving it up to the minute by minute moves of auction is not reassuring. You might not spend your budget and reach your audience.

The sellers of media have goals and executives that need to forecast revenue. Minute by minute forecasting doesn’t really work. This will encourage sellers to sell upfront deals to lock in demand and commissions.

5. Attribution is still up in the air and just because we can measure better online with clicks and purchases doesn’t mean we aren’t delivering branding benefits. It’s just easier to overshadow with such measurable results around the bottom of the sales funnel. If we can’t predict every result perfectly there is still need to buy and pray you choose wisely.

6. Publishers are getting smarter about how they sell their inventory. Designing the right channel conflict and understanding what each channel should offer as a feature set to advertisers should start to help bring some order.

Wrapping it up, special thanks to the AdMeld team for putting a great event together.

(originally posted on February 4th, 2010 on http://www.robdeichert.com/)

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