How Header Bidding Helps Publishers Increase Their Ad Revenue?

Programmatic advertising has completely transformed the world of display ads, making them more effective and efficient. With the rise of programmatic ads, both publishers and advertisers have been looking for ways to level up their game, and that's where header bidding comes in. This innovative approach of selling ad space has created a win-win situation for both sides, offering publishers more control and higher revenue while advertisers get more access to premium inventory. As per Statista, by the first quarter of 2022 itself, around 70% of online publishing websites and 16% of the top 100,000 U.S. websites reportedly implemented header bidding. 

So, what is header bidding? How does it work? Let’s discover what happens behind the scenes:

What is Header Bidding?

Header bidding is an advanced programmatic advertising technology that displays publishers’ ad inventories to multiple demand sources. When a user visits the page on a browser, the header of the page sends bid requests to multiple Supply-Side Platforms (SSPs), ad networks, and ad exchanges to bid for the ad impressions in real-time before sending out the request to the ad server.

Once the bids are received, they are sent to the ad server. The ad server does the second round of the auction and then makes the final decision on the winning bid, which is then served on the page.

As there are multiple bidders bidding for a single inventory at a time, publishers can auction their best-performing inventories at maximum rates. 

Also Read: 8 Best CPM Ad Networks for Publishers in 2023

Why Header Bidding?

Header bidding, also called advanced bidding or pre-bid, is a relatively new technology that stepped into the realm of programmatic advertising in 2014. Before header bidding, publishers used traditional technologies to sell their advertising space, such as waterfall or daisy-chaining models.

The waterfall setup involves many intricacies, including a ladder of ad networks, SSPs, and ad exchanges arranged from top to bottom based on prioritization. In waterfall, the bid request drops from level one at the top to the last one until the ad space is sold off. This arrangement often leaves much of the publishers’ money on the table.

As the inventories trickle down from the levels, their value reduces. In the waterfall, demand partners are positioned based on their past performance. So, it robs a low-sitting bidding partner, willing to bid extra, of the opportunity to bid at all. The waterfall model also brought in lots of obscurities.

Header bidding solves this and brings in speed, efficiency, and transparency. Compared to the flow of inventories from one step to another in the waterfall, header bidding sends the bid request to all the bidding partners simultaneously. 

What Are the Benefits of Header Bidding?

Header bidding can increase publisher revenue by allowing multiple demand sources to bid on ad inventory in real-time, resulting in higher winning bids and increased competition for ad impressions. It also enables more efficient and transparent pricing and access to a broader pool of demand sources. 

Header bidding also provides better control over the sales process, as publishers can access more information about the bidding process and can set their own rules and parameters. This allows publishers to ensure they receive the highest possible value for their ad inventory rather than relying solely on a single ad exchange or SSP.

Additionally, header bidding can help address "ad blindness," where users ignore or are not exposed to certain ads because they are delivered through a limited set of ad exchanges or ad networks. With header bidding, ads are dynamically served from a wider pool of demand sources, leading to increased competition and ad relevance for users.

Also Read: What is Ad Tech Ecosystem? The Past, Present And Future

How to Set up Header Bidding?

Header bidding requires a JavaScript code snippet to be added to the page's header. This is called a header bidding wrapper and helps the website communicate with the SSPs, ad networks, and ad exchanges. Apart from the wrapper, the publisher also needs ample traffic, ad server, bidder adapters, etc. Header bidding also requires a continuous connection between the header bidding wrapper, the ad manager, and the adapters. Other steps to be followed are:

1. Onboard demand partners: Publishers should onboard relevant demand partners, such as ad exchanges, SSPs, or ad networks, to participate in the header bidding process.
2. Configure demand partner parameters: Once demand partners are onboarded, publishers should then configure their parameters, such as bids and targeting information, to ensure they are bidding correctly in the header bidding process.
3. Test and monitor: Finally, publishers should test the header bidding setup and monitor the performance to ensure that the bidding process is functioning correctly and that the desired results are achieved.

It's important to keep in mind that header bidding requires a certain amount of technical expertise and resources to set up and maintain. So, publishers may need to work with a header bidding provider to implement and manage successfully.

The Road Ahead

Header bidding has been a significant advancement in the programmatic space, bringing numerous benefits for both publishers and advertisers. It gives publishers more control over their inventories, transparency, and higher revenue. The increased competition brought by header bidding results in higher winning bids and increased efficiency in the ad buying process. 

However, running header bidding requires specialized technical expertise and may cause latency if implemented poorly. Thus, it is crucial for publishers to partner with a trusted header bidding provider to reap the maximum rewards of header bidding.