Header bidding came around in 2015. Its popularity practically exploded as it gave advertisers more equality in terms of bidding..
Now, header bidding is more or less the preferred approach to ad serving for publishers that want to earn more for their ad inventory. The auctions are quick and automated and the publishers always leave with the most money possible.
However, not all that glitters is gold.
Overall, header bidding is a solid solution. Of course, while there are significant advantages to header bidding, there are also quite a few critical disadvantages for publishers.
These disadvantages have the ability to make or break your website. To find out whether this automated process is right for your website, you’ll need to gain a deeper understanding of the header bidding limitations.
What Exactly Is Header Bidding?
Header bidding, also referred to as advanced bidding or pre-bidding, is the process in which multiple advertisers participate in a digital auction to win the ad space on a publisher’s website.
This auction is conducted with every page load and any time an ad unit refreshes.
With header bidding, publishers are able to earn more money simply because advertisers are allowed to directly compete with one another. The increased competition drives up the bids, which results in higher CPMs (costs-per-mille) and overall higher revenue.
Before header bidding, there was the ad waterfall. With waterfalls, ad inventory could only be offered up to one ad network at a time. That means publishers had to prioritize who they wanted to work with, which resulted in ad stacking and setting a minimum “floor” bid per network.
The issue with this is that the winning bid depended on the position of each network. Higher-tiered networks would win bids simply by meeting the floor price, even if a lower-tiered network was offering more. This layered demand-source system is what we call waterfalling or daisy chaining.
The bottom line — it left both money on the table and publishers wanting more.
With header bidding, everyone has an equal chance starting out. Advertisers can bid fairly, regardless of their position, and publishers have more control over who they work with — plus the potential for greater revenue with each bid.
What Are Header Bidding Disadvantages?
The header bidding disadvantages are small but mighty — which is why we stress their importance. One or more of these issues may mean that header bidding isn’t suitable for your website, and you’ll need to find an alternative.
Here’s what to watch out for in terms of header bidding limitations:
Latency Issues
When web pages are intentionally stopped from loading in order to obtain bids, the risk of increasing page load time becomes a prevalent issue. In fact, the entire activity is counterintuitive because you’re creating an inefficiency in your attempt to make more money — which can cause you to lose money.
As a publisher, it’s your job to balance these types of advantages and disadvantages. Running header bids means you could potentially be promoting downtime on your site.
However, if you’re generating more money than you were before you started using header bidding, then it may be worth it.
When weighing the pros and cons, you must ask yourself, are you making more money despite the cost of losing some visitors due to a slower connection? Will those visitors willingly come back, despite your site not loading as quickly as it could?
Concurrent Connection Congestion
For most of us, what we do digitally today is primarily done on our mobile devices. As is, these mobile devices are overburdened for bandwidth with everything they’re trying to download. On top of it all, header bidding adds to that burden by asking the various networks to do more.
Depending on which browser the user employs, there’s only a certain number of concurrent connections you can make per domain. For example, an older internet browser such as Internet Explorer may only be able to support six or seven concurrent connections.
If you’re requesting 20+ header bidding partners, who do those six connections go to?
A newer browser like Chrome or Safari may be allotted significantly more concurrent connections, extending into the teens and twenties. While this is much better, it’s still limiting, as you’ll likely be attempting to request a lot more bids.
There are far more variables involved in concurrent connections compared to dealing with latency issues. You need to figure out how many concurrent connections are realistic, which are the best partner connections based on your allotted connections, and what is the optimal timing for doling out these connections.
Unfortunately, the technical and scientific data is lacking in this area. Therefore, it’s up to you to decide which variables are appropriate and how you’ll be able to execute them to generate revenue while others are trying to connect with your website.
Conflicts of Interest
On the outside, header bidding seems like a straightforward process of bidding and winning. However, it’s not actually that transparent, and not all collaborations are fair.
This shouldn’t be surprising if you’re familiar with the world of ad tech. However, it’s still an incredibly crucial issue because data collection is becoming more sophisticated, and providers are becoming more involved.
Part of your job as a publisher involves entering into partnerships where valuable data is supposed to be provided to the service providers. The service providers in question use this data to gain visibility into the market, which is very much beneficial to them.
On the other hand, it’s not so beneficial to you, the publisher, as it leads to a very clear conflict of interest in terms of privacy laws. If the service provider is also doing its own buying or providing buy-side services, it doesn’t leave you with any leverage, especially if you get penalized for compliance and policy violations.
Therefore, it’s essential that publishers educate themselves on the service providers they partner with. Find out the service provider’s policies regarding proprietary data, where their interests lie, whether or not they’ll deliver on their promises of transparency, and so on.
Chances are, if the service providers you’re trying to work with won’t give you any answers, they can’t be trusted. The only protection you have is research, so make sure you don’t sign off on any bid deals unless you know exactly what you’re getting yourself into.
For many publishers, it’s not a perfect system, but it works and it’s quickly become the de facto standard across the industry. Reach out to us today; we can help you determine if header bidding is right for you. We can help you with your website monetization so you don’t have to do the guesswork when it comes to maximizing your revenue.