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What Is Header Bidding and How Does it Work?

February 11, 2021

Header bidding is becoming a popular topic in the programmatic discussion, and for a good reason. We’ve noticed how advertisers and publishers are familiarizing themselves with how the ad technology works.

In our article, we’re going to:

  • Give you a brief explanation of header bidding.
  • Explain a little about how it works.
  • Cover the benefits for both publishers and advertisers.
  • Note the advantages of using an advertising solution.

By the end of the article, you should have a much better understanding of what header bidding is, how it works, and the benefits it offers.

What Is Header Bidding?

Header bidding, also known as pre-bidding, is a type of programmatic buying technique. It lets publishers offer their inventory to several ad exchanges simultaneously. Multiple sources can bid on the ad space, and it gives publishers more control over the process.

https://commons.wikimedia.org/wiki/File:Header_Bidding_(scheme).png

How Does it Work?

Before pre-bidding became more prevalent, ad space used to be auctioned off through the “waterfall system.” Where pre-bidding awards the inventory to the highest bidder, the waterfall method goes through bids sequentially. If it finds one over the minimum threshold, it automatically displays the ad, even if there’s another, higher bid for the same spot.

One of the main issues with the waterfall process is that the ad space’s selling price doesn’t necessarily reflect its actual value. There may have been advertisers willing to pay more for the inventory. However, since they were too far down the chain, their bids were never considered.

Pre-bidding works somewhat differently. Briefly explained, when a user visits your site, the header tag connects to the different ad networks, including exchanges, SSPs, and DSPs. The various networks place their bids, and the overall highest bidder gets to display their ad. The operation takes place in a fraction of a second.

Why Publishers Use Header Bidding

In our experience here at Softonic, publishers benefit greatly from pre-bidding. Here are a few of the many advantages of using this programmatic technique:

More Demand Resources

Advertisers don’t want to pick up the scraps at the tail end of a waterfall auction. With header bidding, publishers open their inventory to a broader range of buyers from SSPs, DSPs, and ad exchanges, giving them an equal opportunity to bid on premium space.

Greater Fill Rate and Higher Revenue

Header bidding considers all available bids to find and accept the highest one, letting publishers sell their inventory at an optimal price. With a more significant number of advertisers participating in the auction, the chances of getting a better fill rate are also automatically increased.

The higher fill rate and better bids allow publishers to increase their overall revenue. In our experience with our Softonic clients, publishers can generate up to 16% of their revenue through prebid and header bidding partners.

Increased Control

With header bidding, a publisher can control which sources can participate in the auction. They can also prioritize certain advertisers and retain more control over their site. It gives publishers the chance to monitor ad quality, which is an added benefit.

Why Advertisers Use Header Bidding

Advertisers can also benefit from using this programmatic ad buying technique. It offers them more opportunities to place winning bids and increase their reach. Other ways advertisers can benefit include:

Premium Inventory

Publishers used to sell their premium inventory via a private marketplace. Typically, that leaves “lower-quality” spots available to the open market. With pre-bidding, advertisers now have a complete view of the available inventory and can bid on and secure premium ad space.

Improved Targeting and Reach

The system allows advertisers to access data such as:

  • How many impressions the ad inventory gets.
  • The demographics of the site’s visitors.

Using that data, advertisers can work out more efficient targeting and bidding strategies that allow them to reach their ideal audience.

The Benefits of Using an Advertising Solutions Platform

Even if you choose an excellent ad exchange or bidding platform, there are challenges that you’ll need to overcome. In our experience at Softonic, there are several issues that publishers typically encounter, including:

  • Lengthy integration times.
  • Complicated integration processes that require a skilled developer.
  • Meeting minimum traffic requirements set by SSPs.
  • Regularly updating and maintaining ads and the integration code.
  • Negotiating rewarding partnerships with SSPs like Index Exchange and Rubicon.
  • Optimizing load times and ad delivery.
  • Performing time-consuming and technical maintenance.

Many publishers either aren’t equipped or don’t have the time to deal with these issues. That’s why we recommend partnering with an advertising service to optimize. They can manage your programmatic ads and the header bidding process, and any technical changes or updates. Such a strategic partnership offers many benefits.

Pre-Packaged Advertising Stacks

Advertising solutions, like Rev.Amp, come with a pre-packaged advertising stack. It allows for much quicker turnaround times during the bidding setup and programmatic deal handling. Additionally, you won’t need to develop the code yourself but can instead take advantage of a well-crafted and optimized solution.

Easy Setup and Customizable Solutions

Softonic’s Rev.Amp advertising solution is essentially a “plug-and-play” solution. You add the code and leave the rest to us. We customize the solution to fit your site and needs, and you’ll be able to liaise with a dedicated consultant during the entire process.

Remote Management

Implementing header bidding doesn’t stop with adding the required script. For example, you’ll need to update the code whenever there are updates or configuration changes. It can be a complicated and time-consuming exercise, and you’ll need at least some technical knowledge to make the changes.

Unlike other advertising services, Rev.Amp doesn’t provide publishers with the script. Instead, we manage the configuration remotely. We implement changes and optimize the programmatic ad stack with minimal impact on your resources.

Conclusion

Header bidding is a huge step forward in the programmatic advertising industry. The change in the ad buying process gives publishers more control and grants access to more demand resources. It also improves their fill rate and increases their overall revenue. Similarly, advertisers have access to premium inventory and insightful, actionable data.

Implementing a header bidding solution can be time-consuming and complicated. However, advertising services like Rev.Amp can manage and optimize the process on your behalf.

is a Senior Business Analyst focusing on Pricing & Yield at Softonic. As a Senior Business Analyst, Filipe is responsible for maximizing the revenue yielded from the traffic generated by all our properties, including Rev·Amp, Softonic’s new publisher monetization platform. Within Rev·Amp Filipe oversees the pricing strategy, as well as being on the constant lookout for opportunities to improve monetization capabilities.
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