What Is Header Bidding, And How Does It Work?

We hear a lot about this new advertising technique called header bidding, but what is it really, and how does it work? Well, to sum up: header bidding is when you place a little code, provided by you SSP partner in the header section of your website page. This little piece of code allows to activate a simultaneous call for bids from all the different Demand side platforms (DSP) before even calling for your ad server.

This technique was invented to overcome all the issues previously encountered in the classical system, known as the “waterfall model” in which the selling decisions were far from being optimal. Header bidding has so far known a huge success, with its users from the publisher community growing more and more every day.

The most tangible benefit of using header bidding is that it allows to create a unified simultaneous auction for each impression, with each demand competing in parallel with the auctions from the demand-side.

In the previously mentioned “waterfall model”, the selling steps were more or less conducted in sequential phases. The header bidding improves competition by providing a larger access to the auction based impressions.

# Overcoming the Waterfall

Header bidding has more than one benefit. Henceforth, the buyer can access all of the publisher’s inventory, and compete much better. How is that? Well from the buyer’s side, it is now possible to overcome the waterfall model, access all the inventory, and compete directly with the direct demand auction bids. This offers new opportunities to direct buyers who not only can now access the available inventory, but also compete for each impression.

For publishers, the benefits are threefold. First, there is no limit to the number of ad partners they can have. Then, the completion for each impression is considerably increased. Finally, they no longer need to implement the BYPASS system, in which they had to sequentially ask each partners to serve their impressions. So while the publisher benefits from a higher CPM, the advertiser get access to a larger inventory of ad placements. In other words, the advertising markets is now more open than ever for everyone, and this benefits the entire ecosystem.

# What you should take into consideration

When the concept appeared for the first time, some critics argued that it was complicated to implement the code, especially that publishers had to it themselves. To overcome this issue, the concept of header bidding wrapper was quickly created to propose a standard coding structure to simplify the integration of header bidding.

On the buyer’s side, the argument was that there is no distinction between open market requests and header enabled requests (which both belong to the RTB ecosystem), which makes it difficult for a DSP to correctly estimate the value

Despite all that, header bidding remains a huge progress in the world of programmatic advertising with a marketplace that provides competition, transparency and full access to both sellers and advertisers.

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