Real-Time Real Talk

Real-Time Real Talk: Header Bidding 101

“Real-Time Real Talk” is an ongoing blog series that seeks to clarify the “what”, “why”, and “how” behind ad tech innovations

Blog Post
The AppNexus Team

Header Bidding is a smarter way to monetize your inventory by allowing you to integrate with multiple programmatic companies.

Alright, what’s the issue here?

In digital marketing, it’s common practice for a publisher to use a single ad exchange as the primary source for its advertising creatives. At first, this kind of arrangement might seem like a pretty good deal. After all, using a single exchange lets a publisher monetize monthly ad revenue in a manner that’s both easy and relatively profitable. All a publisher needs to do is prioritize serving ads that their ad exchange provides them with, and collect a monthly check for a job well done.

But by agreeing to work with one principal ad exchange, publishers don’t fully realize they’re making a series of concessions:

  • Firstly, a publisher grows highly dependent on a single ad exchange for its main source of premium creative inventory.
  • Secondly, ad exchanges exact a varying take rate not only on publishers who want to serve ads, but also on advertisers who want to bid on those impressions. As a result, a publisher’s ad revenue can get snipped away until there’s little left to monetize.
  • Finally, and as if these two first problems weren’t enough, if there isn’t an advertiser willing to bid on a publisher’s available impression, that publisher then has to endure a process known as “waterfalling,” where other ad networks get notified in sequence – one after another – in hopes that one of them will serve an impression. Meanwhile, the publisher’s website experiences a problem known as “latency,” the slow-load time it takes while searching for an impression to be served. Latency increases the likelihood that impatient, would-be users migrate towards other, faster websites – not the ideal situation for the publisher.

In sum, while it may seem like a good idea at the time to set up with one sole ad exchange, arrangements like these leave publishers shortchanged on access to relevant creatives, overcharged in terms of revenue, and faced with potentially slow latency speeds.

Got it… so what can we do about it?

Fortunately, there’s a strategy known as header bidding that allows publishers to get around all this. By adding a snippet of JavaScript to their website, a publisher can use header bidding to alert multiple exchanges that an impression on their site is available to be served. Furthermore, it alerts these different ad exchanges simultaneously so they’re bidding for the same impression at the exact, same instant.

Header bidding has three main benefits for a publisher:

  • By allowing multiple ad exchanges to bid on a sole impression, the publisher has the freedom to see the true market value of their inventoryThis freedom gives a publisher greater insight as to the exchanges it should conduct its business with.
  • It lets the publisher determine the market value of its impressions, thereby giving the publisher control in determining the header-bidder that wins the impression (i.e. the ones willing to bid the most on impressions). If you want to get technical, see how this is done.
  • It greatly reduces the latency issues that come with traditional “waterfalling”. Rather than taking the long way in trying to sell an impression to exchanges, header bidding allows multiple exchanges to bid on the same impression at the same exact instant prior to an ad actually being served.

Sounds promising, but how does it work?

Prebid.js is the JavaScript that makes it easier for a digital publisher to work with multiple header-bidding partners simultaneously. While Prebid.js takes longer to implement than simply opting to do business with a single principal ad exchange, this 100% free and open-source JavaScript is well worth the few extra hours – not weeks or months – of setup time. The long-term benefits to setting up Prebid.js are substantial. Prebid.js lets publishers monetize their inventory by ensuring that multiple header-bidding partners can bid for an ad. It also enables each bidding partner to have a fair and free-market shot at bidding on a publisher's available inventory. Moreover, it doesn’t slow down the publisher's site as it loads, and simplifies the setup work for the Ad Ops team.

Even if the Prebid.js code isn’t vendor specific, when installed correctly, it can be the ultimate game changer (and life saver) in helping a digital publisher to monetize their website – and grow their business.

You can also check out our latest post on Digiday, Ditching DFP: 3 tips for publishers using header bidding.