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The Header Bidding Info You Need to Know

The Header Bidding Info You Need to Know

Written by enCOMPASS Agency

One of the most valuable programmatic bidding techniques is what’s known as header bidding. Header bidding is an advanced programmatic technique wherein publishers offer inventory to multiple ad exchanges simultaneously before making calls to their ad servers (mostly DoubleClick for Publishers). Header bidding gets its name because publishers offer ad space by placing a JavaScript code in the header of their website. The benefit for the publisher is that it makes it easier to access more advertisers and earn more money; the benefit for the advertiser, meanwhile, is that it affords them more and higher quality ad impressions, as well as useful data they can glean to better strategize their ad campaigns.

Header bidding is becoming an increasingly popular practice, enough so that advertisers really can’t afford to ignore it any longer. Consider this post a brief overview of where header bidding is going in 2019, and why it might matter for your brand.

Header Bidding Has Reached Maturation

More and more U.S. ad dollars are being funneled into programmatic advertising, and as a result, publishers are seeking more ad space that they can sell.

Header bidding provides it, and because it’s a technique that many publishers and advertisers are already comfortable with, it makes sense to continue refining it—making it a more effective and transparent option.

More and More Auctions are Going to First Price

Beyond the maturation of header bidding, another issue to consider is that first price auctions are increasingly the standard. As such, advertisers have to bid algorithmically to make sure the price they’re paying is a fair one.

There is a reason why first price auctions are increasingly commonplace, and it’s that second price options are just very challenging to implement for header bidding. This is especially true in scenarios where you have multiple demand sources. First price auctions are more logical because they allow publishers to get the highest possible amount for their inventory while advertisers get price transparency—that is, the ability to see how much their impressions are actually sold for.

What About Header Bidding Containers?

We mentioned some of the advantages of header bidding; some of the drawbacks are increased page latency and loading times, both of which can be detrimental to the user experience.

Publishers have responded to these problems with containers—basically, technology that helps them organize and manage their bidding partners and the complex coding that header bidding entails. Thanks to these header bidding containers, all bids can be made simultaneously, and the ad server is fed accurate and up-to-date information at all times.

These containers come in different categories, and there are three that are especially worth noting.

  1. Client-side wrappers, which are placed in the browser. Basically, a piece of code is embedded in the publisher’s website to connect the advertisers looking to bid on space. These containers are great for transparency, though not always as effective at dealing with the load time and page latency issues.
  2. Server-to-server wrappers exist on an external server and harbor all the info that was once on the browser. Because they work from an external server, they can help with the latency and loading time issues—but the sacrifice is transparency. There’s less audience data available to advertisers, and as such, they tend to bid less for these opportunities.
  3. Hybrid wrappers blend the two types mentioned above, and really provide the best of both worlds. Unsurprisingly, then, they are a popular choice.

Header Bidding is Always Evolving

While header building is by now a fairly familiar practice to most advertisers and publishers, that doesn’t mean it’s stagnant. Actually, there are a number of new header bidding trends that are worth noting:

  • Bid caching allows publishers to elongate the life of bids; this practice has been controversial, to say the least, if only because it’s not transparent.
  • Soft floors are basically artificial bids that publishers can use to make sure first price auctions hit a certain threshold. As you might imagine, soft floors have proven frustrating to advertisers.
  • Bid shading allows for bidding between the first and second price auctions, ensuring that the advertiser does not pay too much for impressions.
  • Finally, note that both in-app and video header bidding are in their nascent stages now; while they aren’t common tactics just yet, they will definitely be taking off in the not-so-distant future.

This last point is good evidence that header bidding’s best days may still be ahead, and it’s certainly not going anywhere anytime soon. For companies looking to learn more about this technique, we’d love to talk with you. Header bidding is something we’ve leveraged on behalf of many of our clients, and to positive effect. We’re here to chat about it any time you like; reach out to enCOMPASS to start that conversation.