Sortable.com - waterfall vs. header bidding

What you need to know about header bidding

What is header bidding?

Header bidding is a programmatic advertising technique that allows publishers to offer their inventory to multiple ad exchanges simultaneously before sending requests to ad servers (ie. Google Ad Manager). 

Header bidding evolved from waterfall bidding, which was a popular, but inefficient form of auctioning ad space. During a waterfall auction, publishers would offer their ad space from ad network to ad network in descending order of importance and once a bid is accepted, the ad space is no longer available. One major issues with the waterfall method is that an advertiser in a lower stage of the waterfall may be willing to pay more than someone higher, but if a bid is accepted before theirs, they automatically lose without even seeing the inventory.

Header bidding sets an equal playing field - everybody bids at the same time. Header bidding can earn publishers more revenue while also giving advertisers an equal opportunity to bid on high-quality ad placements.

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How does header bidding work?

Header bidding relies on a piece of Javascript in the head of a publisher's page which runs a real-time auction and allows buyers to bid on advertising. This all happens in a matter of milliseconds and for every ad space available. This is the process of header bidding:

  1. A user clicks to open a website and the publisher's head tag requests several ad networks to bid on the ad slot to fill the available impression.
  2. The ad networks place their bids.
  3. The winning bid is passed to the publisher's ad server. 
  4. The publisher's ad server connects the user to the advertiser's server, which shows the winning ad creative. 

What value does header bidding provide to publishers?

Header bidding can give publishers advantages over waterfall auctions, the biggest advantages include: 

Increased revenue  With less reliance on a single SSP, overall yield and fill rates increase when publishers increase the prices for their premium inventory as there's more competition between ad networks. 

Increased control  When various demand sources bid at the same time, publishers can control which sources have the ability to participate in the bidding process.

Reduced discrepancies  Ad header bidding is a single auction across multiple partners simultaneously; there's a high level of transparency and no sequential chaining, which drastically reduces reporting discrepancies.

If you want to learn more about header bidding or ways to maximize your ad revenue, please contact success@sortable.com. If you aren't a Sortable customer, but want to learn how Sortable's solution stacks up against the competition, and has the best analytics platform in the industry, request a demo today and start on your path to earning more. 

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