Header bidding integrations, or something very close to it have been common for years with retargeting networks like Criteo seeking ‘first-look’ relationships with publishers, but it’s only recently that the major sell side platforms started to integrate this way. The major difference between the retargeters and SSPs is that retargeters have all the demand within their own platform, while the SSPs and Ad Exchanges rely on an auction with external parties to fill impressions.
What is Header Bidding?
Header bidding is a method for publishers to integrate with their RTB demand partners. Those could be ad exchanges, supply side partners, or direct links they might have with DSPs or programmatic networks.
Critically, header bidding integrations allow a publisher to request a bid from each and every partner simultaneously and before they decide what ad to serve. Instead of having many partners fragmented from each other in a waterfall based on their aggregate yield, all demand partners compete for every impression at the same level of priority. Publishers only redirect an impression to demand partners when they bid, so every demand partner now fills at 100% (or should get very close), which eliminates the need for passbacks and pain of high discrepancies and reporting issues that come with them.
A header bidding integration contrasts with a tag-based integration, which has been how a publisher has historically worked with a programmatic demand partner. A tag-based integration is the same thing as 3rd party ad serving. The SSP would give the publisher an ad tag to place in their ad server, which they could then traffic to whatever inventory the publisher wanted. Usually, the publisher would serve out all their guaranteed demand first, and then if there was any inventory left over, they would start calling the SSP’s tag.
There are still 3rd party tags involved with a header bidding integration, but what makes a header bidding integration different is the script in the publisher’s header that “flashes” a user to the SSP without having to serve their 3rd party tag. Let all that sink in for a moment, because the differences are just huge. No more waterfall to manage, no more passbacks, advance valuation from the SSP, the idea that the “winner” of the SSP auction can still lose; it’s a sea change to the way publishers have historically managed the programmatic channel.
How Does Header Bidding Work?
With the bid value from each demand partner as a key value in the ad request, publishers can now target specific line items in their ad server to those bid values. Tag based integrations that ran a single SSP tag to “size = 728×90” can now traffic a similar tag to “size = 728×90 AND price = 1.20”. The presence of the bid value in the targeting criteria means the line item will only serve when a demand partner bids. Not only that, but ad ops can set a rate for the line item at the same value as the price variable, which enables the SSP’s tag to compete in a highly accurate fashion with other programmatic partners, including Google’s Ad Exchange, all yield optimized impression by impression through Enhanced Dynamic Allocation. One key element to pre-bid integrations is that the publisher has a choice on whether or not to accept the bid.
Now, if you haven’t realized yet, header bidding integrations also have a cost in terms of requiring far more line items in the ad server. What might have been one run of network line item per ad size with a tag based integration now requires a line item per ad size per bid value – it can easily be hundreds or even thousands of line items to traffic. Some publishers will group bid values into small buckets by using wildcards on the bid values, perhaps dime ranges or dollar ranges (for example, price = 1.1% for every value between 1.10 and 1.19, turning nine line items into one), but the most granular the values, the better the yield optimization.
Where header bidding gets a little complicated is that while it appears to be a universal functionality, and even a specialty among certain platforms like Sonobi or Beanstock Media, each platform does things a bit differently. Some platforms pass exact bid values, some platforms pass simply a “yes” or “no”, some platforms pass a “above average”, “average”, “below average” signal, it’s hardly standardized. This means it’s also not all that straightforward to optimize between multiple header bidding partners. How do you decide between “$1.24” and “above average”?
What’s also unique about header bidding integrations is the bid response from the SSP partners will sometimes contain the exact creative tag to serve, and sometimes will require a redirect to their system like any 3rd party tag. This OpenX patent is one of the only piece of intellectual property I could find on the topic of header bidding, and it mentions the idea of storing the winning creative information in a user’s cookie in section .
Click here to read more about the technical process to how header bidding works.