Header bidding, also known as header auction or pre-bidding, is a programmatic advertising technique used to improve the efficiency and transparency of the ad auction process on websites and apps. It allows publishers to offer ad inventory to multiple demand sources (advertisers and ad networks) simultaneously, before making ad calls to ad servers, in order to maximize ad revenue.
Here’s how header bidding works:
- Ad Inventory Offer: When a user visits a website or app with ad space available, the publisher’s web page sends a request to the header bidding container.
- Header Bidding Auction: The header bidding container hosts an auction where multiple demand sources, such as ad networks or DSPs (Demand-Side Platforms), can submit bids in real-time to compete for the ad impression.
- Simultaneous Bidding: All participating demand sources have an equal opportunity to bid on the impression at the same time, rather than relying on a traditional waterfall model where demand sources are prioritized sequentially.
- Pricing Transparency: Bids are submitted with the associated bid price, allowing the publisher to see the value offered for each ad impression. This transparency helps publishers make informed decisions about which bid to accept.
- Winner Selection: The highest bid is typically declared the winner, and the winning ad creative is displayed to the user in real-time.
- Ad Call: After the header bidding auction, the winning bid is passed to the ad server, which retrieves the ad creative and delivers it to the user’s device, ensuring that the chosen ad is displayed.
Header bidding offers several advantages:
- Increased Competition: By enabling multiple demand sources to participate simultaneously, header bidding maximizes the competition for ad impressions, potentially leading to higher ad rates and increased revenue for publishers.
- Better Pricing Control: Publishers have more control over ad pricing and can set the minimum acceptable price for their inventory, ensuring they get the best value for their ad space.
- Transparency: Publishers gain insights into the value of their ad impressions, making it easier to assess the performance of different demand sources and make data-driven decisions.
- Improved User Experience: Header bidding reduces latency and improves page load times, as it streamlines the ad call process, resulting in a better user experience.
However, header bidding also has some challenges, such as increased technical complexity and the potential for page latency if not implemented correctly. Publishers and advertisers need to carefully manage their header bidding implementations to strike the right balance between increased revenue and user experience.
Overall, header bidding has become a widely adopted technology in the programmatic advertising industry, helping both publishers and advertisers optimize ad inventory and revenue opportunities. Take a deeper dive into DSP buying with our Buyer Guide: https://populationscience.com/demand-side-platform-buyer-guide/