A quick guide to Header Bidding as a digital advertising option for web publisher
(Image Credit: www.mycustomer.com)
The world of marketing and advertising have been taken over by digital advertising - it's an industry that has grown by leaps and bounds owing to its strategic positioning in this era. It, however, is not still immune to inefficiencies one of which is caused by fragmentation of demand sources.
These inefficiencies have led to loads of attempts at solutions in form of new technologies and strategies aimed at maximizing the revenue earned per advert.
Publishers always seek to make more money - and they need to make more to keep the industry going. One of the ways they intend to do this is by designing products in line with the ”new” concept of Header Bidding.
An Introduction to Header Bidding
By definition, Header Bidding is an advanced and programmatic technique wherein publishers auction ad inventory outside their primary servers allowing advertisers to select high priority impressions before contacting their ad servers. In this technique, publishers allow multiple bids on an ad inventory at the same time giving the advertisers a "first look". "Pre-bidding" and "Advance bidding" are other terms used to describe.
Here's the technical insight, when publishers allow multiple bids on the same inventory, demand increases and ideally inventory value follow suit; this means more revenue. This concept is not entirely new, it is only beginning to gain popularity.
According to Jonathan Mendez, CEO of Yieldbot, “Header bidding is a much cleaner and better tech integration between revenue partners, ad tech companies and publishers compared to what’s going on currently,”
Header Bidding versus Current Ad Techniques
The digital ad industry is still predominantly run by the famed "waterfall" structure technique with a reluctance to make a marked shift, and reasonably so; the current system brings in some money albeit inefficiently. In this system, impressions are offered in a single sales channel usually the highest priority channel (like direct orders) and then transferred to lower paying channels till a bid is made. As Purch's CTO, John Potter points out, "You lose a lot of inventory to that process". Header Bidding, on the other hand, gives the publisher the power to prioritize bids according to actual bid value. More on this below.
What's in it for Publishers?
The publisher gets the benefits of a well-conducted competitive auction – greater yield. John Potter noted that an additional header bid source can up yield by up to 10 percent. The use of a unified server-side for all their ad inventory affords the publisher the privilege to sell based on impressions per inventory, not to mention that it helps them understand the real value of their impressions. The publisher is also spared the loss caused by moving inventory all too often, something the waterfall structure is notorious for.
The problem with supply-side platforms SSPs
SSPs are basically yield-optimizing platforms for publishers and often times use Real Time Bidding (RTB)* when dealing with demand sources. The presence of various SSPs would seem to preclude the need for a similar technology in header bidding, but therein also lies its flaw. SSPs are owned by different companies and as such, there is the issue of competition. This competition – as we know in the ad industry - industry leads to fragmentation of demand sources; this hampers the publisher’s yield.
* Header Bidding is often referred to as an upgrade on Real Time Bidding
The need for a better solution
Probably the biggest concern for publishers adopting Header bidding is the loading speed of their pages. Header bidding tags just like any other SSP tag adds to page latency, an index they would prefer to keep at the barest minimum. Though Header bidding could put more money in the publisher’s wallet, a slack web page could spell doom especially as readers are becoming more impatient and ad intolerant. Speed is of the essence.
There is also the issue of its complexity to implement. Not much of an issue for professionals, it’s still worth a mention.
Despite its limitations, Header Bidding is just about the ripest fruit on the branch of digital advertising. As Shani Higgins, former CEO of Technorati aptly puts it, “from the publisher perspective, it’s a better way than what they’re doing now”.
