What is Header Bidding, Key Benefits and Best Practices  

Imagine publishers’ frustration when they see ad revenue slipping because outdated systems limit their earning potential. Yet programmatic bidding has changed the game, providing a solution that allows publishers to better control their ad space and revenue streams. Thus, today, we learn what is header bidding and how to use it. 

To give context, in October 2023, only 3.3% of the top one million websites had adopted the bidding technology, highlighting its increasing importance in digital advertising.

It is also one of the most innovative AdTech solutions for optimizing ad revenue while maintaining transparency in the auction process. This approach enables publishers to invite multiple advertisers to bid on their ad space simultaneously.

In this article, we’ll provide insights into header bidding. Whether you’re new to this solution or seeking to understand its growing impact, keep reading to discover how it’s transforming digital advertising.  

What is Header Bidding?  

Header bidding is a programmatic advertising technique that allows publishers to invite multiple advertisers to bid on their ad space simultaneously. Thus, creating a competitive and transparent auction. Unlike older methods, this advanced bidding technique increases publishers’ chances of receiving the best possible bid, maximizing ad revenue.  

To implement it, you, as a publisher, must add a unique JavaScript code wrapper to your website. This wrapper organizes and manages the bidding process, ensuring each advertiser has an equal opportunity to bid on the available ad space.  

Also, there are two types of bidding wrappers:  

• Proprietary Wrapper: This type is managed by service providers who handle setup and technical support. It is easier to implement and comes with built-in analytics tools, but it relies on the provider for updates and support.  
• Open-Source Wrapper: This wrapper is customizable and flexible, allowing publishers to set their own rules for bidding. However, it requires more technical resources to maintain and update.  

Programmatic bidding unlocks ad inventory for more demand sources within milliseconds by running real-time auctions for each impression, enhancing advertiser reach and publisher revenue potential.  

How Does It Work?  

Now that we understand header bidding, it’s important to understand how it creates value for publishers and advertisers alike.

So, the bidding starts as soon as a user lands on a webpage. When the page loads, the bidding wrapper contacts various demand sources, such as ad exchanges and demand-side platforms, inviting them to bid on the ad space in real-time.   

Each source quickly evaluates the value of the ad space based on its audience and campaign targets, submitting its bids within a brief, pre-set timeframe, usually between 200 and 800 milliseconds. Understanding the difference between first-price vs. second-price auctions is critical, as these models directly affect how bids are calculated and winners determined in header bidding.

Once all bids are in, the wrapper compares them and selects the highest one, prioritizing the most competitive offer. This winning bid is then sent to the publisher’s ad server, which displays the ad to the user.   

This bidding solution invites multiple advertisers to compete for each impression, increasing competition and maximizing publishers’ CPM (cost per thousand impressions). This process provides transparency, allowing publishers to see the true value of each impression and effectively control their ad inventory to drive higher revenue.  

What is a Server-Side Header Bidding (SSHB)?  

Server-side header bidding (SSHB) aims to speed up ad auctions and improve the user’s browsing experience. Unlike traditional client-side header bidding, where the bidding process happens in the user’s browser, SSHB moves it to an external server.   

Here’s how it works:  

• When a user loads a page, a single request is sent to the server.  
• The server connects to multiple demand sources, such as SSPs (supply-side platforms) and ad exchanges, on behalf of the publisher.  
• Each demand source submits a bid for the ad space.  
• The server collects these bids and returns the winning bid to the browser, which displays the ad.  

By handling bids outside the browser, SSHB helps the page load faster.  

The client-side bidding solution can slow down pages because each demand partner’s code runs in the browser. As more partners are added, loading times may increase, impacting user experience. In contrast, server-side bidding centralizes the auction on a dedicated server, allowing the browser to load other page content without delays from ad requests and ad serving.  

While not as common as client-side bidding, SSHB is a preferred option for publishers focused on speed and efficiency. By keeping the bidding process off the page, SSHB retains the benefits of header bidding while providing a smoother user experience.  

What Was Before the Header Bidding Era?  

Before this wrapper was introduced within the Adtech space in 2014 and adopted around 2016, publishers sold ad space using a system known as waterfall mediation. 

Unlike traditional ad mediation systems, which rank ad networks sequentially, header bidding allows simultaneous competition among multiple bidders, ensuring a more transparent and competitive auction process.

In this setup, ad networks were ranked by CPM (cost per thousand impressions), and the network at the top of the list had the first chance to buy the available ad space. If they couldn’t fill the inventory, it would “fall” to the following network, and so on, until all ad space was filled.  

This waterfall method had clear limitations. Top-ranked networks got exclusive access to premium slots, while networks lower down the list could only access what was left. This lack of competition meant publishers often missed out on potentially higher bids from lower-tier networks, leading to less revenue overall.  

In addition to the waterfall method, publishers relied on other approaches:  

• Direct Deals: Publishers and advertisers negotiated directly to secure premium ad slots. These guaranteed placements offered stability but lacked the competitive pricing potential that this bidding solution introduced.  
• Programmatic Guaranteed: This model allowed advertisers to reserve specific ad space at pre-set rates, bypassing any auction. While effective for planned campaigns, programmatic guaranteed limited publishers’ flexibility to capture higher bids through competitive auctions.  

Header bidding transformed this by allowing multiple advertisers to bid simultaneously in a single auction. This approach created an open, competitive environment where each impression goes to the highest bidder, helping publishers maximize their earnings.   

With simultaneous bidding, this bidding wrapper created a more transparent and fairer system, giving all advertisers equal access to ad inventory and transforming digital advertising into a more effective and profitable medium. 

Top Header Bidding Benefits for Advertisers  

As header bidding is changing the game in digital advertising, it’s not just about maximizing profits; it’s also about creating a better experience for everyone. Advertisers get more value, and publishers can maximize their revenue opportunities.   

Here’s how it benefits both sides:  

1. Access to Premium Ad Space: This programmatic header auction allows advertisers to compete for top ad placements previously limited to select buyers. This open access will enable advertisers to reach valuable audiences on premium sites, maximizing their campaign reach and impact.
2. Transparency in Bidding Process: Advertisers gain real-time insights into auction details, including bid values and impression worth. This transparency supports data-driven budgeting and strategic decisions, helping advertisers maximize their ad spend.  
3. Enhanced Audience Reach: By inviting more advertisers to bid, header bidding broadens the pool of potential placements across quality sites. This reach enables advertisers to engage diverse and larger audiences, aligning with their targeting goals.   
4. Efficient Bidding and Faster Ad Load Times: Header bidding simplifies the auction process by allowing bids to happen simultaneously rather than sequentially, accelerating ad load times. Faster-loading ads create a more engaging user experience, as visitors are less likely to encounter delays.
5. Improved Ad Quality and User Experience: With more advertisers competing for each impression, header bidding often results in higher-quality ads reaching targeted users. This relevancy enhances the user experience and increases the likelihood of ad engagement.

This environment aligns the goals of advertisers, publishers, and users, setting the stage for growth in digital advertising.  

When to Incorporate a Header Bidding Solution?

Adding header bidding technology can be great, but knowing when it will be most effective for your site is essential.  

If you’re looking to increase your ad revenue beyond what traditional ad sales offer, header bidding is worth considering. It allows multiple advertisers to bid simultaneously, bringing in higher rates for each ad space. It is useful if you rely on direct deals with a few advertisers.

With header bidding, you open your ad space to more advertisers, creating more variety and reducing dependence on a handful of clients.  

It’s also wise to consider an advanced bidding technique if you’re expanding your ad placements or adding new ad zones. Setting up header bidding from the beginning lets you manage these new spaces efficiently, giving more advertisers a chance to bid on each spot.

For high-value ad placements, header bidding can make these spaces more competitive, helping you attract higher bids.  

As you add more demand partners (like different ad networks), header bidding helps keep things organized. Instead of running multiple separate auctions, header bidding lets all partners bid at once, making git more straightforward to get the best value from each one.    

Header bidding is especially useful for high-traffic sites because it handles multiple bids without slowing down the page. Server-side header bidding can speed things up by moving the browser’s bid.  

Finally, if you want better insights into your ad performance, header bidding provides real-time data on bid values and advertiser interest. This transparency helps you make smart decisions about pricing and inventory, allowing you to adjust your strategy based on what’s working best.  

Header Bidding Best Practices  

After understanding the main benefits of header bidding and when to incorporate it, it’s helpful to know some simple practices to help you make the most of this technology.   

1. To start, add only a few demand partners. While more bidders can increase competition, too many at once can slow down your page. Choosing a manageable number of partners that offer quality bids and fit your site’s needs is best.

Similarly, setting a clear time limit for bids (often between 500 and 800 milliseconds) ensures the page loads quickly without allowing valuable bids to be missed.  

2. Picking a reliable bidding wrapper is also recommended, as the wrapper manages bid requests and keeps everything organized, making it easier to run the auction smoothly. For publishers focused on speed, server-side header bidding can help by shifting the bidding process to an external server so the page loads faster.  

3. Regularly checking your setup is also a good habit. Use available tools to see how each partner performs and make changes if needed to keep things running well.  

Following these simple practices, publishers can make the most of header bidding technology, boosting revenue and ensuring a user-friendly experience. Also, you can always check the relationship between Header Bidding and RTB for a more in-depth analysis.

FAQ   

Does header bidding slow down my site?  

People often wonder if this advanced bidding technique will impact the speed of their site’s loading. The good news is that header bidding can be set up to keep your site running smoothly, mainly if you use server-side options to help keep load times fast.  

What’s the difference between header bidding and real-time bidding?  

It’s easy to get these terms mixed up. Header bidding is a technique that allows multiple advertisers to bid at the same time, while real-time bidding (RTB) is a way of buying ad space through an auction. Header bidding improves RTB by ensuring all advertisers get a fair chance to bid at once.  

Is header bidding useful for smaller websites?  

Smaller websites can benefit from this programmatic header auction since it opens up more bidding competition, which can help you get better ad rates, even if you have less traffic than more prominent sites.  

What are the costs of setting up header bidding?  

Costs can vary depending on the setup you choose. Options include managed services and open-source solutions. Some have monthly fees, while others might require technical help. The options are flexible enough to work for different budgets. 

How does header bidding handle user privacy?  

Privacy is essential, and header bidding works within the rules set by data protection laws like GDPR. It’s designed to respect user privacy, with many setups focusing on secure data handling and consent.  

Final Thoughts  

Header bidding has significantly impacted digital advertising, helping publishers and advertisers work together reasonably and efficiently. It’s more than just a technology; it’s a more innovative approach to getting the most out of every ad placement. For those ready to enhance their ad approach, header bidding offers a flexible, rewarding solution that keeps pace with the demands of today’s digital.