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10 September 2020

Header Bidding: What is it and how does it work?

Header Bidding is a setup that helps digital publishers to maximize their revenue by offering the first call to multiple demand partners, let’s see how it works.

Header Bidding: What is it and how does it work?

Even though Header Bidding provides many advantages, the Italian market is still lagging behind in adopting this setup for the management of the advertising inventory.

In the next lines we will see in detail how the Header Bidding technology works and which are the reasons it should be adopted upon the old approaches.

Let’s start by describing the last events: With the arrival of the programmatic ADV and the SSP ecosystem populating the market, impressions must be offered to as many buyers as possible in order to maximize revenues.

The previous market approach was using the “waterfall” system, where the impression is offered to one ssp after another, at a gradually decreasing price, in the hope that the impression would be bought sooner or later.

Instead of the fragmented way in which impressions are sold in the “waterfall” configuration, header bidding (HB) allows multiple demand partners to bid on impressions simultaneously and in real time, saving time and ensuring that the purchase of each impression is made by the highest bidder in a direct competition.

The main difference between the “waterfall” system and header bidding is that while the first one takes place on the server side (or through a series of servers), the other occurs within the user’s browser through the use of javascript.

This way, the browser collects all the offers and sends them to the only ad server operating on the site (generally DFP) which decides who to give the impression of: direct campaigns, Adx or partners included in the HB setup.

The code that allows HB to work resides in the header of the publisher’s site. That’s the reason why this technology is called "header bidding”.

As Shani Higgins, CEO of Technorati has explained, the goal of this technology is to avoid latency, data leakage concerns and minimize the implementation costs.

Some of the advantages of the HB technology are:

  • Larger profits: The unified auction provides better results and the inclusion of an additional bidder can significantly increase the overall profit.
  • Faster loading of advertisements: everything takes place much faster in header bidding compared to the “waterfall” system and often there is a time limit established for the entire process.
  • Better inventory quality: with header bidding it is possible to offer the first call to all the ssp, increasing the commercial possibilities linked to individual campaigns/advertisers.
  • More transparency: you have confirmation that an offer has been placed on the impression and you are able to see the exact price of each bid.
  • Less management effort: compared to the “waterfall” system, there are fewer variables to set up, modify and manage continuously.

On the other hand, there are some issues to consider when implementing HB:

  • Tough setup: the initial setup of the Header Bidding requires a high level of technical know-how and must be developed on the code side. There are no graphical interfaces that can make this process easier.
  • Slower page loading potential: since header bidding works within the user’s browser, the latency of the page increases and the user may have to wait longer for the page to load. Not wanting to sacrifice the user experience, Evolution ADV has overcome this problem with the development of a setup that combines Header bidding and OptiLoad.

In conclusion, the Header Bidding setup is way more efficient and profitable for the publisher and more advantageous for advertisers who can aspire to win the first call on all spaces. In order to reach the best result with HB, the site must be tagged from scratch.

In Evolution ADV we have developed a modular setup that can be integrated on any site within hours.

After an 8-month test phase on our proprietary websites: Money.it and InformationFiscale.it, we launched our Header Bidding solution on the Italian market, which is finally available for all publishers with quality sites.

If you want to implement Evolution ADV’s Header Bidding to increase your advertising revenue, propose your site.

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