PA Bidding: The Evolution of Header Bidding
How the evolution started
Before the introduction of Header Bidding, publishers had to rely on the inefficient waterfall method of ad serving, offering their inventory to buyers sequentially, in order to maximize their non-guaranteed inventory.
The main problem with the waterfall method is that if a demand partner bids later in the queue with higher bid than the accepted one, publishers lose the best price and fail to maximize the value of each impression. Publishers needed to have their ad inventory opened up to a wider supply of buyers simultaneously to earn a fair value for their inventory. That’s how Header Bidding was born and since then, it has evolved.
Right from the beginning, publishers began seeing greater yields and what their inventory was really worth. But it did not stop there. Technology vendors and publishers have worked together to refine and optimize the process further, making Header Bidding faster, more effective, and easier to manage. Prebid.js was the key actor helping to standardize, improve and evangelize Header Bidding as an open industry standard. With its open-source solution, Prebid.js made the implementation of Header Bidding easier and accessible to all publishers, offering them the potential of increased ad revenue. Each improvement gets publishers better results and pushes new companies to give the solution a shot. Today, this has led the vast majority of top publishers to use Header Bidding, with Prebid.js to be the most popular and widely used wrapper by publishers.
Though all the resources are available, Header Bidding remains a technical solution that is complex to implement correctly without advanced development skills and other resources such as manpower and time.
Why is Header Bidding so popular?
There is a reason why Header Bidding is one of the top buzzwords in the ad tech and publishing worlds. Header Bidding has allowed publishers to greatly increase their programmatic ad revenue. On average, publishers see revenues jump by 20-40% once they start using Header Bidding, with the uplift being even higher in some cases.
More revenue is not the only reason that makes Header Bidding so popular with publishers. Direct and transparent access to reporting data, at least in the case of client-side Header Bidding, is also an important aspect for the success of Header Bidding.
How Header Bidding Works: Client-Side vs. Server-Side
Header Bidding is an advanced programmatic advertising technique of integrating demand partners (ad exchanges, SSP’s, ad networks etc.) which allows publishers to offer their inventory to many demand sources simultaneously.
Header Bidding starts as soon as a webpage begins to load on the user’s browser. In parallel, the wrapper, the code that has been placed by the publisher in the header part of the webpage, initiates the auction by sending bid requests to the demand partners.
Header Bidding auction works on the first-price auction model. This means that the bidder with the higher bid gets to serve their ad creative, and they pay exactly what they bid during the auction.
In case no demand partners’ bid meets the floor price or the timeouts have exhausted, the inventory is offered to fallback networks like AdSense, based on Ad Manager settings.
There are ultimately two types of Header Bidding: client-side and server-side.
Client-Side Header Bidding
In the case of client-side Header Bidding, the auction runs on the user’s browser. This allows cookie matching for better targeting, as publishers and advertisers can easily synchronize their cookies during the bidding process. Known for causing high page latency, due to higher browser resources and bandwidth consumption.
Server-Side Header Bidding
Server-side Header Bidding takes place on a server, not a browser. While the user’s webpage is loading, it makes a call to a single third-party server which then sends the request to the demand partners. Publishers are not limited and can work with as many demand sources as they want, and many calls can be made at once without comprising the user’s experience.
This technique saves network bandwidth and browser resources, decreasing page latency as a result. However, when it comes to targeting, the server-side method does not have the desired results due to decreased cookie match rates.
Which Solution is Right for You: a Hybrid Approach?
In order to get the best of both auction types, our recommendation is to go for a hybrid Header Bidding. This is where publishers run both client-side and server-side Header Bidding together. While client-side Header Bidding offers greater control and monetization for standard formats, it lacks in user experience due to latency issues. Server-side Header Bidding, on the other hand, offers better user experience as latency issues are minimized, but potential risks arise from lack of control.
The hybrid model combines the best of both by increasing bid competition, while reducing page latency.
Pros & Cons of Header Bidding
Key Benefits of Header Bidding
- Maximized Demand: Compared to waterfall or passback setup, Header Bidding opens up a wider supply of buyers. Header Bidding allows publishers to work with more advertisers, both in terms of variety and number and, thus, increased bid density. Additionally, with Header Bidding, both AdX and Header Bidding partners have the same opportunity and bid together. A greater number of advertisers participating in the auction automatically increases the chance of getting a better fill rate and consequently the overall revenue for the publisher.
- Minimum Discrepancy: Reduced reporting discrepancies, since only a single auction happens in Header Bidding and there is no sequential daisy chaining of partners that increases reporting discrepancies.
- Better Control: Header Bidding allows publishers to be able to configure the auction according to their needs. With Header Bidding wrapper, it becomes easy to manage floor prices, setting timeouts, and adding or removing demand partners in order to balance page latency with revenue.
- Win-Win for Advertisers: What makes Header Bidding very successful is that it benefits both the sell- and buy-side. Header Bidding gives advertisers access to all the publisher’s inventory providing transparency and low discrepancy. This encourages them to invest equally in Header Bidding and bid high enough if they really want to target specific consumers or high performing inventory.
Downsides to Header Bidding
Even though Header Bidding seems to be a win-win option for publishers and advertisers, the technology isn’t without downsides. Here are some drawbacks publishers should know about:
- Technical Overhead to Set-Up: Setting up Header Bidding is heavy since the wrapper code needs to be added to the header section of webpage HTML code. It requires technical knowledge and a fair number of engineering hours in order to implement it properly.
- Page Latency: In case of client-side Header Bidding, the auctions run on the user’s browser, increasing in this way the page latency. However, with server-side auctions this problem can be resolved at the cost of cookie matching.
- Tech Tax for Inhouse Maintenance: Publishers who maintain their Header Bidding solution on their own have also to pay the recurring heavy operational “tax” for maintenance and new technology version updates.
The future for Header Bidding: PA Bidding
Given the benefits that Header Bidding brings to publishers and advertisers, it’s not surprising that it has taken off so fast. But what will the future bring?
Header Bidding continues to be the only answer to the issues associated with traditional programmatic media buying – inefficient demand source traversing, resulting in increased latency and lost profits. It continuously proves that it is an ultimate remedy for low fill rates, poor reach, less control, and numerous report discrepancies. Especially in challenging times like the COVID-19 crisis, it has become more important to increase the demand and, thus, the bids to intensify the competition.
At Project Agora we help publishers optimize their ad stack performance by providing PA Bidding, a Meta-Header Bidding solution, that integrates the best of an expanding list of Header Bidding options. PA Bidding integrates all the available demand sources combining multiple Header Bidding implementations, client-side along with server-side Header Bidding using Prebid.js and other Heading Bidding wrappers (e.g. Amazon).
PA Bidding’s automation and our dedicated onboarding team allows you to start seeing the revenue uplift in days instead of months. There is close to zero development work required, saving publishers valuable research and technical resources, while all maintenance and optimization is undertaken by our Yield Optimization expert team. And best of all, Project Agora’s Analytics Dashboard helps you to monitor websites performance and generate actionable insights for wider use.