Programmatic – Everything you ever wanted to know about header bidding

What you need to know as an advertiser

Header bidding started life to circumvent the waterfall process (more about that later). It’s given publishers a fantastic opportunity to maximise their revenue from their own inventory, and as an agency it gives us a breadth of choice in how we can buy inventory programmatically.

What is header bidding?

It’s a technique whereby publishers offer inventory to multiple ad exchanges simultaneously before deciding on the winning bid. This means that publishers can see all bids at the same time, allowing them to choose the demand source offering the highest bid, and therefore increase their yield and make more money.

How does this differ from the waterfall process?

Traditionally in programmatic auctions, publishers offered their inventory in a cascade based on their perceived value to the publisher. This usually meant bids from direct deals would be considered first, with open marketplace last in the queue based on the assumption that these would provide the lowest yield. The problem with this method is that it left a lot of money on the table for publishers, as those bidders considered the lowest in value could offer the highest bids. Header bidding has solved some of these issues, and allowed publishers to increase their yields, dramatically in some cases. For example, The Telegraph says header bidding has increased programmatic revenue by 70% in 2017 compared to 12 months ago.

How does this benefit advertisers and agencies?

Much of the focus has been on the benefit to publishers, but the buy side has benefitted from this change too through improved viewability and increased reach.

The premium inventory we can now access programmatically was previously only available by direct buy and through some private marketplace deals. Now with header bidding we can access premium inventory that – crucially – also delivers higher viewability levels.

Showing premium placements to all bidders has resulted in more availability of valuable audiences and increased the opportunity for our clients to achieve conversions.

The other core benefit we achieve with this method is the increased reach available through header bidding. Access to all of a publisher’s inventory means that buyers can more effectively deliver campaigns for niche audiences. For example, a client looking to target males between the ages of 25-35 within a 5-mile radius of a given outlet can now see and access almost all this audience in that geographic location, meaning our buyers can execute campaigns with greater accuracy.

However, the introduction of header bidding isn’t without its drawbacks. Greater complexity in set-up and concerns about pressure on page load times has led to the industry exploring other solutions.

What next?

Most see header bidding as just another ‘phase’, with the next step being server-side header bidding, where ad auctions move from users’ browsers into the server. This removes the pressure on page load times, and instead shifts the heavy lifting onto the server side. We are already seeing some of the big players making moves to facilitate this, with Amazon launching their cloud-based header bidding solution at the end of 2016, and Facebook also recently launching their own version via the Facebook Audience Network.

Time will tell where this goes next but the ongoing development of header bidding and similar solutions can only help push programmatic more and more into the mainstream with advertisers.

Crucially, Space and Time will continue to be at the forefront of these changes, ensuring that we’re able to provide display campaigns that deliver the best possible value for our clients.

If you would like to find out more, or are interested in our programmatic services, get in touch today!