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“Header bidding” – it’s the hot topic that’s been circling the mobile industry, touted for increasing publisher yield. You’ve probably heard of it, but is it the right fit for you?

What is Header Bidding?

In a nutshell, header bidding is the process of sending out an initial ad call simultaneously to multiple buyers prior to the page even loading. Buyers get first look at the inventory and submit a pre-bid price. This pre-bid price then becomes the bid floor for the ad server callout, which checks if any other buyers can beat it. Most publishers who implement header bidding report a bump in revenue and CPM, but fair warning, it’s not the secret sauce for everyone.

Header bidding mainly benefits publishers who use Google’s Doubleclick for Publishers (DFP) to manage their ads. DFP doesn’t allow publishers to pull in programmatic buyers that compete against AdX and direct deals, so publishers are limited as to which buyers they can utilize. Header bidding helps publishers get around this limitation by calling all of their programmatic buyers before the ad request is made to DFP. It then passes in the winning price from the header bidding in the ad request to DFP, and uses that as the basis to see if DFP can beat the price. This workaround allows the publishers to offer their inventory to more potential buyers.

Header Bidding for the Buyer

Programmatic buyers like header bidding because they reap numerous benefits. Since the header bid is sent out to all of the buyers, buyers get first look at the inventory and see all potential inventory. In a waterfall setup, if the buyer is not at the top of the waterfall, they may only see a fraction of the inventory if buyers above them fill the ad request.

Second, due to the ad request being made directly from the page and not the ad server, the buyer is able to check and set their own first party cookies. This benefit is often overlooked or downplayed, but it’s extremely important. Buyers are able to build and manage user profiles themselves without requiring a syncing process with the publisher. When an exchange sits between the user and buyer, the exchange is not able to read the buyer’s cookies, making the cookie syncing process more complicated. With header bidding, a buyer can now access their own cookies directly. Some publishers may see this as a potential privacy issue (since buyers have more direct transparency into the publisher’s users), but it typically results in higher fill because buyers are able to better target their desired audience.

Lastly, it allows many programmatic buyers to access DFP inventory that they would most likely not have access to without a header bidding solution.

Header Bidding for the Publisher

Naturally, buyers are eager for more publishers to adopt header bidding, but publishers should be thorough in choosing partners. Publishers have the power to be selective and demanding about what buyers they integrate.

Aside from the potential to increase revenue, header bidding can help to flatten out waterfall setups. Because the initial header bid request is simultaneous, all the buyers receive the request at once rather than sequentially, one at a time. Through the pre-bid process, publishers are able to gain access to more buyers than what’s set in their waterfalls.

Another attractive benefit to publishers is the reduction in passbacks. With header bidding, the publisher knows if the buyer wants to buy the inventory from the initial header bid request. Unlike a typical waterfall setup, there is no need to implement a passback with them if they do not want it.

Considerations before implementing header bidding

The potential revenue bump is attractive for publishers, but based on your setup, it’s important to consider all the implications before deciding whether it’s the right fit for you.

  • Header bids can negatively impact the page load time since the bids are sent out prior to the page fully loading. However, the additional load time can be minimal if set up properly and may not impact user experience much.
  • As previously mentioned, users using DFP (or an ad ad server that limits their ability to pull in multiple programmatic ad sources) will probably see the most benefit. If using an ad server that makes simultaneous ad calls server-side, many of the benefits are diminished.
  • Header bids have been primarily implemented by mobile web publishers. It’s possible to craft a solution for in-app inventory, but it currently doesn’t translate easily over to mobile apps.
  • If concerned about user privacy, you may decide to opt against header bidding since it gives buyers more insight into your users. You will need to decide whether this outweighs the benefits.
  • If using DFP, there can be a considerable amount of work required to setup ad lines to support the header bidding buyers. DFP requires each buyer to have an ad line set for each price point in order to serve the advertisement. Since the price returned in the header bid is variable and changes, the publisher needs to set up many more lines than a typical setup in order to capture all potential price points or price point buckets (for example $1.1* so any price between $1.10 and $1.19). This result is more upfront work, but once in place, minimal maintenance is required.
  • Lastly, you need to consider is how many, if any, of your buyers are programmatic. If you work only with exchanges where you’re paid a set price or have only direct buys at a pre-negotiated price, then header bidding will not benefit them much since they already know how much the buyer is willing to pay them for their inventory.

Header bidding can have a positive impact on the bottom line, but make sure to take all things into consideration to determine if it is the right solution for you. Review your current ad serving setup, the buyers you’re working with and decide if you’re comfortable with the tradeoffs (potentially less user privacy and increased page load time) required to implement it. If implemented in the right scenario, header bidding can benefit both buyers and publishers.