Header bidding: The revolution of programmatic advertising

Header bidding has taken programmatic advertising to a whole new level. The status quo has been challenged to overcome the problems of the waterfall model by implementing a new disruptive technology. It’s also having a huge impact on other channels such as video or mobile ads

But what do you know exactly about header bidding, and what secrete lies behind it?

In today’s article, we’ll take a deeper look at this new trend to try and answer all these questions.

WHAT DOES HEADER BIDDING STANDS FOR?

In simple words, Header bidding is a programmatic technique that allows publishers to control the way they sell their ad space.

The selling of impressions is done peace by peace instead of providing thousands all at once. Informed decisions can therefore be taken because publishers get to collect important data such as the spending of each advertiser and other buying habits.

WHY IS IT SO IMPORTANT?

Before header bidding, the only available solution was waterfall auction where all the ad servers are aligned in a way that if an impression is not sold in the first one, it moves on to the next tier, and so on until it crosses all of the available options.

From a publisher standpoint, there are two major issues with this approach. You cannot select which provider you want to work with, and the selling price won’t necessarily reflect your impression’s true value.

The reason is that whenever an impression is sold in auction, the advertiser who places the highest bid is automatically served. If no one within the tier places a bid, it switches to the next tier until someone puts the price.

Put simply, each stage only has a limited number of contenders, and the problem here is that there might be another advertiser from another tier who is willing to offer a higher price, but never gets the chance to.

Header bidding solves this issue by simply allowing all the buyers to place their bids at once. With this solution, the prices increases drastically allowing the publisher to make more revenue. In addition to that, advertisers have a chance to place their bids at same time and compete more fairly with one another.

GOOGLE’S CHALLENGE TO HEADER BIDDING

This revolution has been a wake-up call for Google and the reason is simple.

If you’re a publisher, you probably know about Google’s DoubleClick. This platform is used by website owners to serve their ad inventory. Google has been using this a competitive advantage as it provides a complete visibility over the inventory of the publisher, which allows it to systematically bid on the best spot first.

Header bidding solves this issue. So Google had to come up with something to counter-attack, which they did when they launched a new Solution called Exchange Bidding — arguing that this new platform is much faster than header bidding, and that more than 200 publishers have been able to use it to increase their revenue by 48 percent.

WHAT SHOULD WE EXPECT IN 2018?

With all the benefits we talked about, it comes as no surprise that header bidding has taken off so fast. But what should we expect for 2018? Well let’s have a look at some of the key elements.

Wrappers will be smarter.

Also known as frameworks, HB wrappers have also experienced an upturn. These are simply a technical solution used by publishers to simultaneously manipulate several header bidding solutions and use them all at the same time.

The functionality and usability of header bidding wrappers have been continuously improved to obtain an even better control over the process.

Server-side header bidding

The Header bidding approach was first used on what we call the “client side”, meaning that the coded is embedded within the web site to directly connect with advertisers though the browser. This often slows down the website as a lot of JavaScript code need to be run to make the connection process. Many publishers tried to solve the problem by limiting the number of ad partners, but this goes against the whole point which was to offer the auction to everyone.

Problem solved by Server-side header bidding. The idea is simply to move the auction so that it can take place in an external server. The code is still embedded within the website, but the requests are directly sent from the ad sever to all partners.

If you want to know more about header bidding feel free to get in touch with our team. Recall offers a platform that optimizes both time and efforts for publishers by connecting all their sell side partners for a centralized and simplified analytics.

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