Key Points

  • Header bidding is a programmatic advertising technique—not a separate concept altogether.
  • It allows publishers to offer ad inventory to multiple demand partners simultaneously, increasing competition and potentially boosting revenue.
  • Unlike the waterfall method, header bidding ensures publishers get the highest possible bid for their inventory and gives all advertisers fair access. 
  • While header bidding offers significant benefits, its implementation can be complex - partnering with an experienced ad tech provider like Playwire can simplify the process.

If you're a publisher trying to decide between programmatic advertising and header bidding for your digital ad sales strategy, we have good news: you don't have to choose. 

That's because you can implement both. In fact, to do header bidding, you have to engage in programmatic advertising. Header bidding is a sophisticated technique within the programmatic ecosystem that allows publishers to offer their ad inventory to multiple demand partners simultaneously. This approach changes how publishers sell their ad space and interact with ad exchanges. 

Still, we know publishers have many questions about programmatic advertising and header bidding, so we've addressed those issues in this post. We'll explore how these methods work, their benefits, and how they compare to traditional waterfall bidding.

To get the best of programmatic and header bidding and keep your ad revenue at the tip top of the charts, work with Playwire. Find out more about our revenue amplification platform.

What Is Header Bidding and How Does It Relate to Programmatic Advertising?

Header bidding is a technique within programmatic advertising that allows publishers to offer their ad inventory to multiple ad exchanges simultaneously before making calls to their ad servers. This increases competition among demand partners, potentially leading to higher CPMs and improved ad revenue for publishers. 

So what is programmatic advertising then?

In short, programmatic advertising the broader automated process of buying and selling ad inventory in real-time. Header bidding fits within this larger programmatic framework, and offers a more efficient way to conduct programmatic auctions.

To put it simply, all header bidding is programmatic advertising, but not all programmatic advertising is header bidding.

The Real Question: Header Bidding vs. the Waterfall Method

Asking someone to compare programmatic advertising with header bidding is like asking someone to compare vegetables with carrots. In other words, the question doesn't quite work. Still, it's hard to exaggerate the importance of header bidding in the history of programmatic advertising. So, what exactly did header bidding change? 

Put simply, it changed the way we auction ad inventory. It made it a more democratic process that was fair for both publishers and advertisers. 

To understand this better, let's compare header bidding to its predecessor: the waterfall method.

What Is The Waterfall Method?

The waterfall method, also known as waterfall bidding or the daisy chain, was the traditional way of selling programmatic ad inventory. 

Here's how it worked:

  1. Bid requests would go to buyers one by one, in a predetermined sequence.
  2. Each buyer would make a bid or decline.
  3. If the bid didn't exceed the price floor, the bidding process would move down the list to the next bidder.
  4. This process continued until a bid was accepted or the inventory went unsold.

Bidders were organized by perceived importance. How likely they were to make a good bid helped to determine their placement on the list. The problem with this approach was twofold:

  1. Publishers often didn't get the highest possible bid for their inventory.
  2. Advertisers lower on the list struggled to access premium inventory, even if they were willing to pay more.

How Header Bidding Improved Programmatic Advertising

In 2014, header bidding entered the chat — at least, it was the technology that would soon be known as header bidding. This technique offered a whole new way to conduct auctions, eliminating some of the most concerning problems of the waterfall method. 

Header bidding works like this:

  1. When a user visits a webpage, bid requests are sent to multiple demand partners simultaneously.
  2. Each demand partner submits their bid.
  3. The highest bid wins, ensuring the publisher gets the best possible price for their ad inventory.

To manage this process efficiently, publishers often use header bidding wrappers. These wrappers are JavaScript tags that organize multiple demand partners and set rules for running the auction. They streamline the implementation of header bidding, making it easier for publishers to add or remove demand partners as needed. 

This simple change solved two major problems:

  1. Publishers now get the highest possible bid for their inventory.
  2. All advertisers, regardless of size, have a fair shot at winning the auction if they're willing to pay the right price.

By implementing header bidding, publishers can increase their ad revenue and improve fill rates, while advertisers gain more equitable access to desired ad inventory.

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Header Bidding Pillar

The Complete Guide to Header Bidding

Is Header Bidding Better for Publishers?

At Playwire, when we're trying to decide between two or more choices, we always ask ourselves this question: what's better for publishers? That's because we put publishers first in everything we do. And it's a fair question to apply to programmatic advertising techniques like header bidding, especially compared to something like the Waterfall Method. 

While it’s not your only option, header bidding does offer significant advantages for publishers. 

Here's how:

  1. Increased Competition: Header bidding allows multiple demand partners to bid on ad inventory simultaneously. This increased competition often leads to higher CPMs and better fill rates for publishers.
  2. Better Yield Optimization: By exposing inventory to multiple ad exchanges and demand partners at once, header bidding helps ensure that publishers are getting the best possible price for each impression.
  3. Improved Transparency: Header bidding provides publishers with more insight into the value of their inventory across different demand sources.
  4. Reduced Passbacks: Unlike the waterfall method, header bidding significantly reduces the need for passbacks, which can slow down ad serving and negatively impact user experience.
  5. Access to More Demand: Header bidding opens up inventory to a wider range of advertisers, including those who might not have had access in a traditional waterfall setup.
  6. Better Control: Publishers have more control over which demand partners participate in the auction and can easily add or remove partners as needed.

Let's illustrate this with a hypothetical example: 

Imagine a lifestyle blog that previously used the waterfall method for programmatic advertising. This sequential approach often left money on the table, with higher-paying advertisers potentially missing out and ad slots going unfilled. 

After implementing header bidding, the blog could see a significant improvement. By allowing all demand sources to compete simultaneously, header bidding typically leads to higher CPMs and improved fill rates. The result? A substantial boost in overall ad revenue, as the blog maximizes the value of each ad impression. 

In the end, if you're going to do programmatic advertising to sell your ad inventory, you should implement header bidding. Why? Because header bidding gets you the best bid at every auction — not just the first acceptable bid. And because header bidding increases your access to inventory demand, it also increases your fill rates. Hard to argue with that. 

However, it's important to note that implementing and managing header bidding can be complex. It requires technical expertise to set up and maintain, and if not done correctly, it can lead to issues like increased page latency. This is where partnering with an experienced ad tech provider like Playwire can be invaluable.

Programmatic, Header Bidding and Everything Else Publishers Need

Decisions like the choice between pure programmatic vs. header bidding can be confusing. Among busy publishers who are focused on creating great content, who has the time to manage the technical complexities of ad inventory optimization? That’s where Playwire steps in.

How Playwire Simplifies Programmatic Advertising

Playwire offers a comprehensive platform that combines programmatic advertising, header bidding implementation, and direct demand partnerships to maximize ad revenue for publishers. Here’s what sets Playwire apart:

  1. Header Bidding Expertise: Playwire handles the setup and maintenance of header bidding wrappers, ensuring that your auctions run smoothly across multiple demand partners without increasing page latency.
  2. Access to Multiple Demand Sources: With Playwire, publishers don’t need to worry about managing relationships with multiple ad exchanges or demand partners. The platform integrates seamlessly with multiple ad networks and exchanges, maximizing competition for your inventory.
  3. Revenue Amplification: Playwire doesn’t just stop at header bidding. The platform optimizes every aspect of your ad stack.
  4. Transparency and Reporting: Gain full visibility into how your inventory is performing across different demand sources with detailed analytics and reporting tools.
  5. Simplified Implementation: From integrating header bidding wrappers to optimizing ad placements on your web pages, Playwire handles the technical heavy lifting so you can focus on growing your audience.

These features work together to create a seamless, efficient advertising ecosystem for publishers. By leveraging Playwire's technology and expertise, publishers can overcome the complexities of modern digital advertising and focus on what they do best: creating engaging content for their audience..

Why Choose Playwire?

Now you know the benefits of working with Playwire—but what do they look like in practice? Let’s imagine a hypothetical scenario: You’re a mid-sized publisher running a website with lifestyle content. You’ve been relying on basic programmatic advertising but feel like you’re leaving money on the table because you don’t have time to manage header bidding or direct deals. 

With Playwire’s platform:

  • Your ad inventory is exposed to multiple demand partners simultaneously through expertly managed header bidding.
  • You gain access to premium advertisers via private marketplaces and direct campaigns.
  • Your revenue increases significantly because of higher competition for your ad impressions.
  • You save time and resources because Playwire handles everything from implementation to ongoing optimization.

At Playwire, it’s our mission to turn publishers into revenue-generating machines — it’s what we do, and it’s what we love. 

If you’re ready to stop worrying about managing ad tech complexity and want a partner who puts publishers first, get in touch with our expert team today. Contact us online to start the conversation today.

Programmatic Advertising Pillar

Programmatic Advertising: What Publishers and Advertisers Need to Know