If you're a publisher in the digital ad space, header bidding is likely on your radar, regardless of whether you’ve actually used it in your own ad strategy.
There is a reason header bidding has become almost an industry standard. Both web and app publishers tend to see an uplift in ad revenue when they roll out a header bidding wrapper, which makes it worth consideration. 

Header Bidding Stats Infographic Video

Optimizing ad revenue through header bidding requires dedication to data analysis, multiple header bidding integrations, and fine-tuning connections to multiple demand partners. Doing header bidding is one thing, but doing it well is a trickier proposition.

 

 

What is Header Bidding?

Header bidding  is a technique used by some publishers to bring in ad revenue that they might not otherwise be able to access. It was created in part due to frustration with structures imposed by ad servers, which made it so that programmatic demand couldn't be accessed all at once - in other words, waterfall bidding. This meant publishers were leaving money on the table when awarding ad placements to bidding sources.

What Is Waterfall Bidding? A Traditional Approach to Programmatic Advertising

Waterfall is a traditional approach to programmatic demand bidding, where individual sources are accessed one after the other. So, in other words, the bidding process looks like this: 

  1. You access one source and see whether it comes in with a bid request for your open ad inventory. If they do make a request and it meets the price floor, the process ends.
  2. If they don't make a bid request, you access the next source and see whether it comes in with a bid.

And so on. While this explanation is simplified, it's more or less how a waterfall auction operates. 

A waterfall approach is problematic because it favors the first bid received. If a bidder comes in early in the waterfall auction, other bidders are never asked for bids. Meaning if Source A offers a $5 bid but Source B was going to bid $7, that missed opportunity for the highest bid translates to missed revenue for the publisher. 

This traditional approach doesn't encourage a competitive environment, much to the detriment of publishers and their revenue stream. An ideal situation would allow Source A and Source B, and Source C, D, E... - you get the point - to compete in an auction-style format for your ad space.

This is where header bidding comes in.

Why is Header Bidding Better than Waterfall?

Simply put, a header bidding model creates simultaneous competition for your available ad space or ad inventory. It allows both web and app publishers to compare all bids in an auction format in order to select a winning bid, ultimately making an informed decision that will likely result in higher ad revenue. 

A header bidding integration works by using a script, usually called a header bidding wrapper, which is installed within the web page itself. This differs from the traditional method, where the selection of ad sources takes place within the ad server. With header bidding, additional demand partners are "talked" to before going to the publisher's ad server. 

By making the ad server the last step in the header bidding process, a competitive landscape is developed where the ad server's role is to award the space to the most qualified and competitive source, instead of the first source to place a bid request. 

With the consideration of multiple simultaneous bids and qualifying data in an auction, publishers not only gain greater revenue opportunities, but a wider net is cast that captures quality demand sources that may have been missed with the traditional waterfall approach.

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Header Bidding Resource Center

Header Bidding Resource Center

Header Bidding Stats

As we mentioned, the benefits of header bidding for publishers include greater competition resulting in more revenue opportunities. But let's take a closer look at some of the stats:

 

 

7 Header Bidding Statistics to Know:

Consider that in 2023, programmatic advertising was valued at approximately $546 billion. That is a big share of advertising budgets. And header bidding is a big part of that investment.

Header bidding continues to play a significant role in the digital advertising industry. Its ability to increase competition among advertisers and optimize ad inventory value has made it essential for publishers that want to maximize ad revenue. As the technology evolves—especially with the rise in AI and machine learning—we can expect to see further adoption and innovation in the header bidding space.

When to Incorporate Header Bidding Technology

Your ad tech stack will evolvee and grow as your audience grows. You don't need much more than Google AdSense or Google Ad Manager to fill your inventory in the early days. 

Publisher Tech Stack (1)

As your volume of page views or daily active users grows, your ad stack will get more complicated. High-value ad units, legal and privacy matters and adding broader demand become important to publishers as they grow. 

Header bidding often comes in as publishers move away from just Google's ad network or ad exchange as a demand source, typically around 300,000 page views per month for websites or 10,000 daily active users for apps.

Key Considerations For Header Bidding

When it comes to header bidding, knowledge is power. The following sections highlight some of the key things to consider and take into account as you think about your approach to header bidding.

Incorporating More Ad Demand Partners

The goal of header bidding is to increase competition for your ad inventory. The more demand sources you integrate into your header bidding setup, the higher the competition will be between each potential advertiser, ultimately driving incrementally higher CPMs for each ad impression.

Building out the infrastructure to integrate and manage a set of demand sources that comprehensive is typically cost-prohibitive as a single publisher. Publishers who manage their ad tech stack in-house typically integrate between 1-5 demand sources depending upon maturity.

Additionally, incorporating premium inventory (like direct sales) to the auction also helps to increase competition, driving higher CPMs from all sources.

Another important benefit of increasing your total number of demand sources will be an increased fill rate. The more sources you have bidding on each ad request, the more likely that slot is to be filled.

Selecting and Managing Header Bidding Wrappers

In order to run, header bidding implementation requires a script that will not only put your available ad placements out there but will collect bids and data from multiple demand partners. 

You can obtain a header bidding wrapper one of three ways:

  1. Build it yourself.
    If you have the knowledge, ad tech, and resources to build your own script, this may be an option. However, before taking it on, be certain that you and your team fully understand how to do it correctly, or you risk implementing a script that may actually prove detrimental to your efforts.
  2. Find an open-source script.
    Prebid, for example, is an open-source header bidding wrapper that has emerged as the most common way for header bidding to be run on a page. You also need to know that open bidding scripts don't work out of the box, so you will need dev resources to make sure everything works as intended and all variables are being accounted for. Every bidder has its own special parameters that you have to set in order for demand to flow, and if you don't do those properly, you can miss out on a lot of revenue.

Another important thing to keep in mind is that there are bidders who are not available through the Prebid server, most particularly Amazon and its Transparent Ad Marketplace. Publishers looking to tap into all of these demand sources, and the multiple ad exchanges they allow access to, in order to maximize revenue have to consider adding additional ad tech to handle both Prebid and Amazon TAM.

  1. Work with a partner.
    If you don't want to do everything that comes with building your own script or finding an open bidding script, working with a partner that offers a soup-to-nuts managed solution is ideal. A partner will not only give you a script but a proper product that handles all of the additional complexities that come with a header bidding integration.

Playwire, for example, has written a script that is entirely optimized for the purpose of reaching each source, getting responses back as fast as possible (imposing a time limit for responses), and relaying all data and bids to the ad server. We've also done the work of plugging in tons of demand sources and making sure all the relevant parameters are being passed to each one. Plus, our team handles the relationships, contracts, and other elements of header bidding, so you don't have to.

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Header Bidding Pillar

Read our complete guide to Header Bidding for everything you need to know!

Header Bidding Challenges

Developing a header bidding system that maximizes ad revenue can come with additional complexities.  Here are a few of the top challenges to watch out for:

  • Client-side header bidding keeps the header auction script or code on the publisher's page and it is executed on the user's browser when visiting the website. This means that all the logic to request and receive bids and then pick a winner is happening on the user's browser, which can increase latency and damage user experience.
  • Server-side header bidding is a newer approach that takes some or all of the bidders out of the page and into a separate server to run the auction. A solution like this will keep latency down and maximize user experience.
  • Amazon TAM provides access to the Amazon ad marketplace and Amazon-specific services that can become an additional monetization opportunity in combination with other header bidding services. With TAM, Amazon acts as a central hub for header bidding services, so users need to have existing relationships with multiple demand partners.
  • Amazon UAM, Unified Ad Marketplace, is similar to Amazon TAM, but publishers are able to access a list of SSPs along with the access they have to Amazon's Demand Side Platform (DSP).

Header Bidding Data and Analytics

In everything you do with header bidding, the more data you have, the better off you will be. With visibility into the data collected, you will be able to adjust your process and fine-tune your approach in order to reap the greatest benefits.

Getting your header bidding setup is only the beginning. There's also the ongoing process of vetting and signing up more header bidders to participate in the auction, market changes, new SSPs entering the space, and individual specialties. Add to all of that the conversations you'll need to have with bidders, the legal side of contracts with SSPs, etc. and you've got a lot on your plate. This is why professional solutions and organizations can be the best solution for publishers.

Why Invest in a Proven Header Bidding Solution?

Header bidding implementation can be complicated, but the added revenue benefits shouldn't be ignored. If ad revenue is a big part of your business, a path to ensuring header bidding is done well is to turn to a professional solution.

A professional header bidding solution:

  • Can be much quicker to set up across your inventory.
  • Is able to pipe in a bunch of header bidders without the publisher having to get involved.
  • Can be optimized to properly balance ad load times against ad revenue to maintain user experience - something that requires some ongoing data analysis to do correctly.
  • Can use the various more sophisticated approaches to header bidding listed above to drive additional revenue.
  • Incorporates direct advertiser demand.

A professional header bidding solution, built by those with the right know-how, accounts for all challenges, opportunities, and complexities, offering a tried and true approach to increase your programmatic demand revenue.

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More Header Bidding Resources

  • The Complete Guide to Header Bidding for Publishers: Read about header bidding from A-Z with this guide from our experts. Read the guide.

  • Header Bidding Solutions: Maximizing Revenue from Header Bidding: Learn how to properly set up and manage a header solution in order to maximize your revenue and maintain user experience.

  • 6 Biggest Benefits of Header Bidding: Learn the ins and outs of header bidding and the 6 biggest benefits publishers can get from using this technique.
  • Why Publishers Need Header Bidding: Five key reasons why header bidding is a must-have programmatic advertising innovation for publishers.
  • Video Header Bidding: Learn everything publishers need to know about video header bidding, and how to implement it.
  • How In-App Header Bidding Works: Learn how you can utilize in-app header bidding to maximize your app advertising revenue.
  • Exchange Bidding vs Header Bidding: In the Exchange Bidding vs header bidding showdown, who wins the night and brings in the most revenue for publishers? This article has the answers.
  • How a Header Bidding Integration Works: Implementing header bidding is simply the process of setting up your website or app to do header bidding. Learn all the steps in the header bidding integration process.
  • Header Bidding vs. Programmatic: Sometimes these terms are used interchangeably or can be confusing. Header bidding is one component of the programmatic ecosystem If you're new to the terms, take some time read this article.
  • Best Header Bidding Partners: Learn more about what to expect from a header bidding partner, and the top partners available to publishers to decide which is right for your needs. Get a detailed list of benefits of the top players like Google AdX and Open Bidding, Index Exchange, Amazon TAM and more.
  • Playwire vs. DIY Header Bidding Solutions: Trying to decide between DIY header bidding and header bidding with Playwire? We’ll compare the two approaches so you know exactly what you’re in for no matter what.
  • Revenue Intelligence: Revenue Intelligence is proprietary technology Playwire has developed to be driven by a single purpose: to increase ad revenue for publishers beyond just that gained from header bidding alone. Read more about how it works.
  • Benefits of Direct Sales for Publishers: Learn more getting direct advertiser demand can increase competition among even your programmatic bidders.
  • Expand your Inventory: Take advantage of ad units that deliver high CPMs that can still be delivered programmatically like Flex Leaderboards, video ads, and site takeovers.