Despite the technology in the adtech space, there are still many inefficiencies and unfair practices that need to be ironed out. Header bids are a solution that brings publishers and advertisers together.
What does a header bid offer?
Header bidding is a process by which many advertisers bid simultaneously (in real time) in a digital auction to gain ad space on your website. This auction takes place outside of your primary ad server every time your pages load or an ad unit is updated.
For publishers, the main benefit is that you get the best deals on your ad space. To do this, you need to make sure that you reach out to supply-side platforms (SSPs) and other demand partners to make sure you have plenty of advertisers to bid on your inventory.
Header bids are a more refined way of auctioning your ad inventory. While it’s a little more complex to implement than traditional methods (such as bidding waterfalls), it has many benefits that are well worth the effort.
How header bids work
Here’s how the whole process goes when a visitor lands on a publisher’s page:
- A visitor clicks A link that takes you to a website
- Every demand partner places a bid on the publisher’s ad inventory
- The winning bid is forwarded to the publisher’s ad server
- The publisher’s ad server The user is then connected to the advertiser’s server and the winner ad is displayed
The process can take several steps, but it takes less than a second from start to finish.
Header Bidding Vs. Waterfall Bid
One of the most popular ways to buy and sell advertising space has been by offering waterfalls. It has worked pretty well over the past few years, and some publishers are still reluctant to move away from it to accept header bids.
The question, however, is which is better: header bids or waterfall bids?
To fully understand why this is your better option, we need to take a quick look at the commandments for waterfalls and their advantages and disadvantages.
What does waterfall offer and how does it work?
Waterfall bidding is one of the earliest forms of programmatic bidding.
Bidding waterfalls is an ancient way of serving ads, where publishers set a minimum price for their ad space. The publisher sets the priority for each advertiser or advertising network it is connected to.
When selling ad impressions using the waterfall bidding process, advertisers are offered inventory at a fixed minimum price per impression. The first ad network to offer at this price will receive the slot.
Another important aspect of bidding waterfalls is that bidders cannot bid by chance. Networks that have a higher rank thanks to the higher historical yield will receive dibs when bidding.
In a way, waterfalls bidding is not an accurate bidding at all.
The biggest downside to waterfall bidding is that the price you sell your inventory for doesn’t necessarily reflect its real value.
Unsold ad space is forwarded to the nearest ad exchange, which depends on the size and not the amount of the bid. The process continues until the inventory is sold. It is because of this cascading nature of inventory passing that the waterfall method gets its name.
Unfortunately for publishers, this means that the publisher will miss out on more revenue if the runner-up was willing to pay more.
9 reasons You should use header bids
You’ve likely noticed some of the advantages of header bidding (for both publishers and advertisers) over other methods of auctioning ad space.
Some of these benefits include:
1. Header building enables publishers to access more advertisers
For publishers, a major benefit of header bidding is that it allows you to expand and diversify the advertisers on your website. It ensures that you don’t have to rely on a small group of advertisers. This increases the resilience and adaptability of your company.
2. Fair bidding
One of the greatest advantages for advertisers is that the playing field is leveled out. That’s because no advertiser has an advantage. All bids are placed fairly and the highest bidder wins, no matter who he is (and even if he is using AdEx).
3. Header building Improves auction efficiency
This type of bid uses real-time prices instead of the historical prices used by other ad auction models. This makes it faster and more efficient.
4. Header bids give you more control
For publishers, one of the main benefits is that you have more control over the sources that can participate in the bidding process. As a publisher, you are in control of your website.
5. Increased revenue
Another reason publishers like to place header bids is because of the higher ad revenue. Not only can you ask more for your premium inventory, you can be sure that the highest bidder wins every time.
6th Improved ad quality
Thanks to increasing competition, advertisers are working hard to make sure their ads are high quality and more relevant to a publisher’s audience. Improved ad quality ensures a better user experience (UX).
7. Improved yield
With header bids, you rely less on a single supply-side platform. As a result, your overall yield increases due to smarter allocation of impressions and a higher fill rate.
8th. Increased fill rates
One of the main reasons you should use header bids is because you will be exposed to more advertisers. The great benefit of this is that it increases the likelihood that publishers will fill all of their ad slots.
9. Better transparency
Advertisers enjoy the improved transparency that header bidding provides. You have access to the publisher’s entire inventory, so you know what’s available and how much it can cost. This transparency helps advertisers make informed bid decisions.
Header bids have so many advantages for both publishers and advertisers that it is undoubtedly worth implementing.
What are the disadvantages of header bids?
This type of bidding seems like the perfect solution for both advertisers and publishers to maximize their ROI, but it has its drawbacks. Here are the main ones:
In order to execute header bids, publishers need to add a script to their site that can slow the page loading speed and result in a poor user experience. Another caveat is that the more advertisers bid on your inventory, the more affected it will be.
You can fix these issues by following website optimization best practices to make sure your pages load faster.
Increased administration costs
Once you have the header bids in place, tight management is required to ensure good performance. In addition to making sure your code works well for all of your partners, customizing bids, timeouts, and various other tasks are also required to optimize your header bids.
Implementing this bid style can lead to increased infrastructure costs for SSPs and demand-side platforms (DSPs). One reason for this is the increased load on their servers. Another is the tools and staff required to run it.
Header bids may have their drawbacks, but overall, the advantages definitely outweigh the disadvantages.
How to implement header bids
Implementing header bids for publishers can be a complicated process. It is a hassle to set up as you may need to develop tons of line items for ad inventory. As mentioned earlier, this can have an impact on page loading speed. The consequences are poor UX for both advertisers and website visitors.
Fortunately, there are a few solutions for this: wrapper and server-side.
Header bidding wrapper
Header bidding wrappers are code containers used to ensure that all auctions start at the same time and end on time. Wrappers also ensure that ads are loaded asynchronously. This means that the content of the page can be loaded before the ads, ensuring that your website’s latency does not affect visitors
Server-side header bidding
Another solution is to implement server-side header bids.
Conventional header bids take place on the client side (also known as the browser side). This means that it depends on the browser to handle the requirements of individual networks. Of course, this can drain resources. Something that header wrappers can address.
One way to solve this problem is to limit the number of advertisers that can bid on your inventory. However, this negates the purpose of header bidding, since as many advertisers as possible should participate.
The server-side creation of headers is a solution to this problem. Server-side header bidding removes the bidding process from your browser and moves it to an external server.
To do this, you need to embed code in the back end of your website. That way, all of the heavy lifting gets transferred from your browser to your ad server. As a result, your browser can focus on what it’s supposed to do: deliver content to your website visitors.
One of the main benefits of the server side is that it improves page load times. This also contributes to a more efficient tendering process.
Whether you are a publisher or an advertiser, you should consider a header bid strategy.
For advertisers, header bids level the playing field by allowing anyone to bid fairly, regardless of the size of the ad network.
Publishers make sure their ad inventory is being sold for what it’s worth. Their main job is to drive traffic to your website and the bid code to make it easy to monetize your website. With header bids, you don’t leave any money on the table, which is a win-win situation for everyone involved.
If you need help implementing a header bid strategy (or even a holistic campaign with other digital ad strategies) please let our agency know. Our team of experts can help you!
As a publisher or advertiser, have you tried to place header bids?
What was your experience with it?
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