Header bidding has already conquered a significant market share and has shown a strong record of boosting publishers’ ad revenue by allowing greater flexibility in choosing the demand partners.
However, most publishers are still wary of header bidding; almost a third (32.3%) of U.S. publishers have not used it in Q3 2020. The adoption is even slower for video inventory, where publishers lament lack of skill set (44%) and development resources (37%).
Nevertheless, header bidding promises lucrative gains to video publishers, as it can boost video CPMs by as much as 50%, and the tech integrations are no longer very demanding and can be solved with several turn-key solutions.
Further, let me review the main benefits of header bidding and dispel any doubts about its application.
Why do publishers need header bidding?
The introduction of the openRTB auction added efficiency and speed to the digital advertising marketplace. This disruptive media buying technology allowed individual ad impressions to be put up for bidding in real-time. oRTB allowed publishers to substantially increase their revenues by selling narrow audience segments that, right now, are in huge demand.
However, despite oRTB usually providing a higher yield than waterfall, it still doesn’t ensure the highest CPMs, and can’t guarantee a sufficient fill rate. As the number of ad tech platforms increased, publishers had to juggle various demand partners with complicated integrations to get an adequate inventory price. Header bidding emerged as a solution to this critical optimization problem.
What is header bidding?
Header bidding is an automated auction technology, which allows publishers to sell their inventory to advertisers through many Demand Side Platforms (DSPs) while receiving bids from multiple advertisers simultaneously. It is an auction where all DSPs have equal access to bidding, in contrast to waterfalling and oRTB, where they enter the auction in turns.
Header bidding removes the informational asymmetry between the publisher and advertiser about the traffic value. It allows publishers to get a fair demand-based price for their ad space.
Why was header bidding invented?
Doubleclick for Publishers (DFP) holds the biggest share in the ad serving marketplace and is widely used by publishers. However, DFP provides limited transparency and does not reveal information about the bids.
One of the DFP competitors, Appnexus, came up with an ad tech hack called Prebid.js. Prebid.js allowed publishers to implement header bidding and diversify their demand. This technology enables publishers to collect bids on their inventory from demand sources before the ad call is sent to their DFP ad server. If DFP couldn’t outbid the price, the placement would go to the highest paying non-Google advertiser.
In such a way, publishers can get a better yield for their placement and better fill rates with HB. For instance, after one of the Admixer publishers implemented header bidding in addition to its DFP integration, the CPM of the ad placement increased from 0.73€ to 1.3€.
How does header bidding work?
The Prebid connection is implemented through a header wrapper, which is installed into the page code.
The header wrapper is a repository of tags. With the ordinary ad tag, you assign an ad placement to a single demand partner or in case of the waterfall, invoke demand partners in turns, but not with the header wrapper, where you can connect multiple bidders simultaneously.
A header wrapper simplifies the management of the demand partners for publishers. By adding bidder identifiers to the wrapper, publishers can quickly connect additional demand partners to the auction.
The technology organizes buyers and sets up timeout rules for bidder responses, and collects multiple bid responses for the RTB auction.
What is video heading bidding?
In display header bidding, the wrapper is added to the header of a webpage. However, there is no header in a video player, as it’s just another piece of JS code.
In the video header bidding, the auction also happens in the wrapper of the web page, and once finalized, it passes the vast URL from the winning bid to the video player.
Benefits of Video Header Bidding
Publishers who choose to adopt header bidding are quickly witnessing the overwhelming benefits of this programmatic method. Among them are:
Header bidding allows publishers to get profound insights about the auction and to analyze bidders’ behavior and performance. Prebid is open-source for publishers, enabling the creation of platforms and tools, which can find meaningful correlations in the log-level data and then optimize the ad request.
Higher ad revenue
Video ads drive much higher CPMs. Right now, there is a significant scarcity of this ad format. Implementing header bidding and invoking multiple demand partners allow publishers to get a fair price for each ad unit. According to Forrester’s industry survey, nearly two-thirds of publishers (61.3%) say that header bidding maximizes ad revenue.
Better fill rates
Header bidding is a flexible solution that allows you to adjust the auction, by quickly adding and deleting the demand partners. In the savvy publisher’s hands, it’s a powerful tool to ensure the best fill rates by optimizing the demand. In a Forrester survey, 57.7% of publishers reported that video header bidding increased their fill rates.
Header bidding takes substantially less time than the waterfall method of trading inventory. In waterfall, demand partners are invoked in turns, while with header bidding, they bid simultaneously, which significantly speeds up the ad serving.
In waterfall auctions, advertisers have limited access to the inventory and cannot see impressions reserved for private marketplaces and direct deals. With header bidding, advertisers can get a comprehensive understanding of the inventory and offer better deals for the narrow audience segments they need, which boosts the publisher’s revenue.
What stops publishers from using video header bidding?
Most publishers are still very cautious about adopting header bidding for trading their media assets. Although the technology is more comfortable to implement than, for instance, oRTB, it is still a technically demanding task.
Prebid.js contains 30 strings of codes, and implementing these solutions may require additional resources, work-hours from the IT department, etc. Many different custom-build wrappers may require specific integrations or are suitable for connection with particular vendors.
How to solve: Pick a ready-made solution with an intuitive interface
The deployment and management of header bidding does not have to be technically challenging; certain ad tech vendors already offer a more user-friendly solution.
Instead of cumbersome integrations through a page code, you can customize your demand partners and timeout rules in an easy-to-navigate interface. Instead of stumbling in the code and calling your developers to the rescue, you can customize all parameters in the dashboard, and it will automatically update in the wrapper.
Integration with DFP requires only adding the vast URL into the video player, while the header bidding setup needs in-house technical expertise. Also, publishers need to make contracts with each demand partner to connect them to the auction. Most publishers worry that these efforts won’t pay off.
How to solve: Choose a vendor with built-in integrations
Instead of striking deals with each individual demand partner, you can use built-in integrations. You can pick and choose as many as you need for your auction. Publishers don’t have to worry about redundant contract signing and operations; all partnerships can be managed through the dashboard.
Video advertising is much more sophisticated than display and needs to factor in many different aspects. For example, there are different video players, and not all of them seamlessly integrate with the Prebid. Various ad formats and protocols have distinct requirements for ad serving and event tracking.
How to solve: Integrate native player
Most players do not have built-in compatibility with the header wrapper, but you can implement it with basic js knowledge. If you are not an avid coder, you may use one of the solutions that goes with a native player. For example, Player.best is an all-in-one video platform that seamlessly integrates with our header wrapper.
To sum up
Header bidding is a disruptive technology that fills the gap in the modern ad serving infrastructure and lets publishers diversify demands quickly while also getting a better price for their ad spaces. Most publishers are reluctant to implement this solution due to the demanding integrations.
However, certain vendors can already take care of the technical nuances and provide a straightforward interface for quickly boosting the CPMs. There are a number of technical hurdles involved in header bidding, but they can quickly be solved with modern turn-key solutions. It is worth your efforts to deploy header bidding once and reap the rewards of the higher fill rates and CPMs in the long-run.
Chief Products Officer, at Admixer
With offices worldwide, Admixer is an independent ad-tech company, providing full-stack programmatic solutions for all market players. Since 2008, the company has been developing an ecosystem of interconnected products to meet the needs of both buy- and sell-side. Now, it has 100+ supply and demand partners, and 3,000+ clients all over the world, and 200 employees.