Header bidding – one of the hottest terms in digital advertising, especially in field of programmatic. You can hear about it on nearly every digital advertising and digital marketing branch conference. You can read that nearly every Internet company has it, use it and love it. You can find information that the header bidding is something very new or nothing new but by a different name.
You can even watch the popularity of the header bidding in Google. Yesterday I have checked what are the most trending stories in Google in previous 24 hours. Except many sport queries I found, the answer was pretty obvious: 09/11 anniversary. So I checked again how popular 09/11 was in last 30 days and compared it with such terms as programmatic, real time bidding and header bidding – as they belong to the same family and I wasn’t sure which of them is most recognizable globally. Results were a kind of shock for me! In 30-day period before the 15th anniversary of World Trade Center attack there were many more users searching for the header bidding than for the 9/11! Anyway, look at it by yourself:
The popularity of header bidding, programmatic, real time bidding and 09/11 queries in Google,
Aug 11th – Sept 11th 2016
OK, so you know header bidding has been all the rage. But what it is in real? The short definition of the header bidding you may check in Yieldbird’s glossary. But read below to get the feeling what it is and how it works. And then think why during regular months more people try to google it out than 09/11. Is it because it’s not clear for everyone what the header bidding is and on the other hand many know they can benefit from it?
What is header bidding?
The header bidding was invented couple years ago. However, it gained its momentum recently. Right now solutions based on the header bidding become publishers’ bread and butter in field of programmatic.
But it is not intended for everyone. If you use it smartly, it will uplift your revenue. If not – it’s a first step to catastrophe and number of unsold ad impressions will rise dramatically. So before you start, better be an upper intermediate or an advanced in programmatic. Just saying.
How header bidding works?
The header bidding democratizes selling of single ad impressions in programmatic. It gives publishers an access to many buying markets, which are SSP (supply side platforms). However, a fundamental rule of the header bidding is that every ad impression put up for auction must be sold on that platform, on which a buyer has proposed. That may seem obvious but it will turn out it’s not.
What happens next? Software chooses the best offer and serve the ad impression or compare it with your leading SSP or ad exchange, usually DoubleClick Ad Exchange by Google. That makes possible for you to auction a single ad impression simultaneously on several SSP’s (e.g. Pubmatic, AppNexus, WideOrbit etc.) and ADX without waterfalling (DoubleClick Ad Exchange). And sell it there where the price is the highest.
In that case there is no second auction, though. The winning ad network pays an amount of its bid. This detail is important in the header bidding model and affects RTB (real time bidding) demand platforms.
Is header bidding ideal?
Well, let’s leave on the side semantic or philosophical discussion if there is at all something as an ideal solution. For sure, when speaking about the header bidding we must remember about technology cost. What is more, there are also expenditures caused by further system management. If we want to implement the header bidding, these elements should be considered at the very beginning and compared with expected rise of revenue.
The header bidding is definitely not for everyone. However, large publishers use it on daily basis. Why? It gives them an opportunity to find an ad campaign best fitting their inventory potential. Which means: thanks to the header bidding they find an ad campaign with the highest price.
On the other hand advertisers benefit from the header bidding, too. They have an access to bigger amount of inventory.
And where’s the catch?
The most common anxiety is longer page loading. Well, a script must query some additional SSP, wait for their answer, a browser must connect with ad servers. It takes time, that’s true.
How long exactly? Usually the maximum response time is 500 – 800 ms (0.5 – 0.8 sec). It is more or less two or three eye blinks. When you pull away at traffic lights you can’t even notice it. When you wait for a website to load, which normally takes a couple of seconds, it’s also time that cannot make you worry.
But if you are a buying algorithm, this is an entire age for you! It’s long enough to make a deal and take additional 30% for a publisher. And if not? The time is over and you start a regular bidding, i.e. on Double Click Ad Exchange. This is also something you should think in perspective of expected higher revenue.
You must remember it’s much more easy to quit the header bidding than to set it up. That is why it is recommended to check in advance which inventory is sold on which SSP platforms. The next step is to work out optimal settings, including the header bidding in your programmatic stuck. And last but not least, it requires constant managing to make it work on all cylinders. Otherwise you will just lose precious ad impressions. And your revenue line would be as small as the curve with number of 09/11 queries on the graph above.
Grzegorz Kubrakiewicz is Head of Technology at Yieldbird. More about Grzegorz and his experience you can learn on yieldbird.com/about-us.