Header Bidding continues to make waves among publishers well into 2016. But its future, looks even brighter.
‘Header Bidding’ was a big buzz word in 2015 and still is even now late in 2016.
Before header bidding was introduced, publishers who were employing the ‘waterfall’ or ‘daisy chain’ bidding method suffered from a loss of impressions when passing impressions back and forth between partners and ad servers.
Since the solution entered the digital advertising ecosystem, header bidding has continued to make waves among publishers. Many large publishers, including Fortune.com and other Time Inc. sites, have adopted it. It doesn’t look like interest in header bidding is slowing down anytime soon and as we move towards 2017, the forecast looks bright and filled with innovation.
But before we discuss what the future has in store, let’s take a step back to re-examine header bidding’s origins.
How does Header Bidding work?
Header bidding relies on a piece of code that is scripted to a publisher website which enables their inventory to be shown to multiple demand sources – including exchanges, ad servers, and DSPs – simultaneously. A real-time auction then takes place on the impression across all demand, and the winning bid is relayed to the ad server to run the ad. All of this takes place in the milliseconds before the page load and before the ad server is able to work through the traditional waterfall.
For a really great explanation, check out this video on header bidding via ExchangeWire.
The benefits of header bidding.
Not only does header bidding help increase the density of demand for publishers, but it also enables the actual highest bid to win. In the traditional waterfall, the daisy chain process could result in some demand partner’s bids never being assessed, despite bidding higher than the winning bid.
Before header bidding, buyer access to inventory was limited by the preferences set within the ad server. The ‘waterfall’ was also originally quite labor intensive, requiring too much human intervention and inefficiencies. For publishers, especially those who don’t have the resources to man the waterfall, this resulted in a significant amount of missed opportunities.
This changed with the advent of header bidding. Beyond allowing publisher partners equal opportunity to purchase impressions, header bidding has an equalizing effect on the auction floor. This drives up demand and yield due to the nature of how many competitive bids are eligible to win the impression.
“It’s no secret that the more competition you enter into the programmatic space, the higher the impression will sell for. Header bidding just helps solve this efficiently.”
Megan Sun / Director, Publisher Relations
ClearPier
Commenting on the impressive changes that header bidding has brought to the fore Megan Sun, Publisher Relations Director at ClearPier, said “the biggest gain that publishers have seen after setting up header bidding is that there is little to no management required for your yield to increase and stabilize itself.” She also added, “It’s no secret that the more competition you enter into the programmatic space, the higher the impression will sell for. Header bidding just helps solve this efficiently.”
Jack Chung, ClearPier’s VP of Engineering, also emphasized the programmatic efficiencies that header bidding allows on the advertiser side. Chung stated that header bidding ultimately improves the “quality of Programmatic and Performance campaigns by allowing them to compete with reserved buys at the same level.” In other words, programmatic will no longer be stuck with the ‘leftover’ so-called lower quality inventory seen at the end of the waterfall.
Early challenges and drawbacks.
As with any technological innovation, there are complications. Early on, many publishers have stated that integration has been among the biggest challenge for them since the concept was first introduced. For publishers without the resources available to help with the setup, integration is definitely the biggest drawback. After all, code is required to be embedded on the website, but the publisher’s ad server needs a corresponding line item mapping as well – this requires some technical know-how.
Other complaints that have arisen have to do with latency. With more information being passed through the header bidder to partners and more partners ‘looking’ at the impression, the effects all this has on page loading times is definitely an issue. Indeed, trying to connect with as many demand partners as possible can result in publishers running too many header tags simultaneously. This of course causes slower load times, which is counterproductive for publishers’ conscious of the importance of strong user experiences.
But some header bidding partners offer ‘time out’ functions which empowers the publisher and lets them determine what is an acceptable amount of time for their page to load before users drop off. Determining this, Sun advises, requires thorough testing to find the sweet spot.
What does the future hold? Innovation and expansion.
It has only been a year since header bidding has entered the digital advertising ecosystem, but its future looks bright.
ClearPier’s take on the header bidding solution is exchange agnostic and allows multiple exchanges to plug in whereas previous versions are exchange specific. Few tech vendors can boast this type of solution and even more attractive for publishers is ClearPier’s tag setup take less time and doesn’t require the publisher to place anything directly on their site.
As Sun puts it, “ClearPier’s ability to offer publishers with more granular settings will mean they get a more robust programmatic solution where latency isn’t a problem, and yield will grow. Our Premium and flexible demand partner selections combined with a DMP and DSP will help push the technology forward, and its expansion into mobile and video.”
Header bidding’s ability to facilitate fairer prices and transparency will indeed likely mean expansion beyond digital into video and mobile. But not before we see it work with high-impact units. As we move into 2017, the development of header bidding technology is definitely one to keep an eye on as it helps reshape the ad trading landscape.
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