Industry Perspectives

Server-to-Server Header Bidding: The Pros and Cons

This post is an excerpt from our latest header bidding white paper. Click here to download the rest today and learn everything you need to know about header bidding in 2017!

Blog Post
The AppNexus Team
Reading Time: ~5min

Wrapper technology made it easier for publishers to implement header bidding, but as they added more partners to the auction, some began seeing increases in latency.

In the traditional, client-side header bidding setup, the publisher’s web page makes ad calls from the user’s browser. With each new demand source, the page needs to make additional ad calls, placing an even greater strain on the user’s browser. Browsers have limited ports they can make calls with, so the whole process slows down if too many are trying to go through at once. Think of it as a giant traffic jam on a one-lane road. Generally speaking, a client-side auction can start to hurt page load times any time it includes seven or more demand partners. In essence, this means that the client-side setup was forcing publishers to choose between opening bidding to the optimal number of demand partners and protecting the user experience.

The technology that emerged to fix this problem is called server-to-server header bidding(S2S), a solution that reroutes the header bidding auction to reduce the strain on the browser. In S2S, the user’s web page makes a single call
to a third-party server, which then makes real-time calls to the publisher’s various demand partners. Unlike browsers, servers aren’t constrained by a small number of ports, so more calls can be made at once. To go back to that traffic
jam analogy, implementing S2S is like building a six-lane freeway that can accommodate many more cars. Though it’s frequently presented as a new technology, S2S is really just the reapplication of the protocol SSPs use to simultaneously call their DSP partners. In any event, S2S allows publishers to work with as many header bidding demand sources as they want, without harming the user experience.

Unfortunately, there are a few possible drawbacks to S2S that every publisher should be aware of.


Possible side effects

The biggest problem with S2S is that it can make it harder for publishers to match their cookies with advertisers. Since media buyers rarely purchase programmatic ads without knowing who they’re targeting at the other end, this issue can seriously damage publishers’ ability to monetize.

The reason S2S lowers cookie match rates is that in client-side header bidding, the header makes ad calls from the browser, where cookies are stored, directly to programmatic demand partners. But in S2S, the auction takes place away from the browser inside a third-party server, and relies on user syncing between the third-party server and the various demand partners. As a result, it’s tougher for advertisers and publishers to sync on user identity.

The other big issue with S2S is that it gives publishers less transparency than they get with client-side header bidding. Since client-side implementations can be executed via open- source code on the publisher page, media companies can easily monitor the auction for any signs of impropriety. By contrast, S2S auctions take place inside a third-party server that is essentially a black box for publishers, meaning they’d be unable to confirm your technology partner’s revenue share fees or prioritization logic of demand structures. However, open-source S2S solutions like the recently released Prebid Server don’t have these issues, as publishers can simply look at the code themselves to confirm everything is running fairly.


So, what’s the solution?

We recommend a hybrid solution that combines both S2S and client-side. With a setup like this, publishers can select which demand partners they want to call directly from their header bidding wrappers and which to call server-side. That way, publishers can maximize cookie matching with their client-side partners and increase bid density from server-side partners, while also managing latency and revenue optimization.

Download our entire white paper to learn more about the next evolution of header bidding, including tips on choosing the best demand partners, implementing S2S, and applying header bidding to new formats like video and native!