If you are a publisher in the digital ad space, header bidding is likely not new to you, regardless of whether or not you’ve ventured into the header bidding world. There is a reason header bidding has become almost an industry standard. The resulting uplift in revenue that publishers see with the rollout of header bidding makes it worth strong consideration.
Optimizing header bidding revenue requires dedication to data analysis, integration of multiple header bidding technologies, and fine-tuning connections to a variety of demand sources. 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 as an additional way to bring in revenue that they might not otherwise be able to access. It came out of frustration with structures imposed by ad servers that make it so that programmatic demand can’t be accessed all at once. This means publishers were leaving money on the table when awarding ad placements to bidding sources.
Programmatic Demand Bidding: The Waterfall Approach
The traditional approach to programmatic demand involves a process in which individual sources are accessed one after the other. So, the bidding process looks like this:
Essentially, you access one source and see whether it comes in with a bid. Then you access the next source and see whether it comes in with a bid. And so on. This creates a waterfall approach.
A waterfall approach is problematic because it favors the first bid received. If a bidder comes in early in the waterfall, 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 translates to missed revenue for the publisher.
This traditional approach doesn’t facilitate a competitive environment, much to the detriment of publishers and their revenue stream. An ideal situation would create an environment where Source A and Source B, and Source C, D, E… – you get the point – are competing in an auction-style format for your ad space. This is where header bidding comes in.
Header Bidding is Different
Simply put, a header bidding model creates simultaneous competition for your available ad space. It allows publishers to compare all bids and data in order to make an informed decision that will likely result in higher revenue.
Header bidding works by using a script that is installed within the web page itself. This differs from the traditional method which had the selection of ad sources taking place within the ad server. With a header bidding approach, additional demand sources are “talked” to before going to the ad server.
By making the ad server the last step in the 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. With the consideration of multiple simultaneous bids and qualifying data, publishers not only gain greater revenue opportunities, but a wider net is cast that captures quality sources that may have been missed with the traditional waterfall approach.
Header Bidding By The Numbers
As we mentioned, header bidding benefits publishers by creating greater competition resulting in more revenue opportunities. But let’s take a closer look at some of the stats
Consider that by 2021, US digital display advertisers will have invested nearly $80 billion in programmatic advertising. That is a big share of advertising budgets. And header bidding is a big part of that investment.
- Header bidding accounted for 73% of total digital ad spending by the end of 2016
- 76% of publisher sites used header bidding by the end of 2019
- 70% of the top 1K US publishers (based on Alexa rankings) ran header bidding in 2017
- By the end of 2020, 80% of the top 1K US publishers (based on Alexa rankings) ran header bidding
- Found bidders increased 91% from 2017 to 2020.
- In Q1 of 2021, 83% of US sites were doing header bidding
- In Q1 of 2021, 66% of publishers were doing header bidding
Header bidding is making up a big part of the digital ad industry efforts and publishers are recognizing the benefits. In Digiday and The Rocket Fuel Institute’s 2016 Publishers, Monetization, and Technology: State of the Industry report 48% of respondents agreed they received higher CPMs with header bidding than the waterfall method.
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.
Header Bidding Script
In order to run, header bidding requires a script that will not only put your ad placements out there but will collect bids and data from demand sources.
You can obtain this script through one of three approaches:
Build it yourself. If you have the knowledge, technology, 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.
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-source 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 Prebid, most particularly Amazon and its Transparent Ad Marketplace. Publishers looking to tap into all of these demand sources in order to maximize revenue have to consider adding additional technology to handle both Prebid and Amazon TAM.
Work with a partner. If you don’t want to do everything that comes with building your own script or finding an open-source 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 header bidding.
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.
Header Bidding Complexities
Developing a header bidding system that maximizes ad revenue can come with additional complexities.
Client-side header bidding keeps the auction script or code on the publisher’s page and it is executed on the bidder’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 is just the start.
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.
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 demand bid partners.
Amazon UAM 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 Analysis
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 solution set up is only the beginning. There’s also the ongoing process of vetting and signing up more header bidders, 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.
A Tried and True Header Bidding Solution
Header bidding 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
- 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 – 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.
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.
If you feel like you are missing out on revenue opportunities, header bidding may be the solution for you.
Interested in exploring header bidding or expanding on what you already have in place? A Playwire header bidding expert is just a click away.