Publishers are increasingly ditching a traditional waterfall setup for header bidding.
Header bidding, also known as auction in the header, enables publishers to receive and simultaneously evaluate real-time bids from advertisers. Unlike a traditional waterfall, header bidding encourages competition between SSPs and allows for a single unified auction. For publishers, this means higher overall yield.
“Rather than just choosing between the open exchange or private marketplaces, the smartest publishers are developing hybrid optimisation strategies that fit their specific business needs,” says says Tim Cadogan, CEO of OpenX. “The trend of header bidding will continue to accelerate and leading solutions will separate from the pack.”
Here are four reasons header bidding is positioned to overtake the traditional waterfall in 2016.
1. Header bidding makes more money and loses fewer impressions
In a traditional waterfall, the publisher sets floors for buyers based on estimated performance. Each waterfall partner only gets a chance to buy when the partner above them has not met the floor, and publishers lose impressions (and revenue) when ad partners don’t get called.
Header bidding works around this problem because it allows exchanges to submit bids before the ad server call. Thus, fewer impressions are lost. Ad exchanges are able to compete laterally rather than sequentially, resulting in a “fairer” exchange for both publishers and the SSPs.
Publishers using header bidding experience a significant bump in revenue; On average, publishers can expect to earn 10-30% more income from header bidding.
2. Header bidding allows publishers to cut Google out of the equation
Header bidding allows ad partners to compete outside of Google AdX, effectively cutting the middleman out of the equation.
“Once they integrate with AdX, publishers can get better yield by enabling the “dynamic allocation” and “enhanced dynamic allocation” features, which give AdX a chance to beat other demand in the ad server, even if it’s not its turn,” says Digiday.
Because AdX can beat out other demand by increments as small as one cent, it has the upper-hand on all of the other ad partners. Header bidding eliminates the need for AdX, which means less money in Google’s pocket and more in yours.
3. Header bidding decreases latency
One thing to note – the more advertisers bidding in the header, the longer the page will take to load. In order to optimize page load time, use eight or fewer SSPs.
4. Header bidding requires less ongoing maintenance
Header bidding usually takes longer than a traditional waterfall to implement. However, once the bidder is set up, it’s much less time-consuming to manage.