The success of a publisher’s inventory monetization campaign depends on several factors, the main one being the number of advertisers. The more advertisers get offered your inventory, the higher your income. Previously, it was the Waterfall cascade model that was used to offer advertising slots to marketers at real-time auctions; today, it is replaced by the Header Bidding technology.
What is it, and most importantly, what makes it better than Waterfall?
How does Header bidding work?
This automated ad purchase technology was developed in 2009; however, its active implementation only started in 2018. The publishers appreciated its convenience, as the model allows them to offer advertising slots directly to the partners. Today, about 80% of the websites listed by Alexa ranking use Header Bidding.
Header bidding operation principle
The technology allows publishers to hold preliminary auctions for their inventories on a real-time basis and, at the same, accept bids by advertisers and advertising networks before sending ad server requests. On completion of the auction, the system automatically chooses the buyer (and their ad) that has offered the highest price per thousand impressions. Next, a request is forwarded to the server, and the auction winner uploads their ads to the ad slot that took part in the auction. The ad is then displayed to users.
Every bidder has a chance to purchase the ad slot, although it is going to be allocated to the one offering the highest bid. Publishers, from their side, know the prices that advertisers are willing to pay.
Preliminary inventory sale auctions take place with the help of the publishers’ unique JavaScript codes that are embedded into the website or mobile app headers. Here is what happens next:
- A user downloads a web page.
- The script sends simultaneous requests to all the partners connected to the publisher.
- The maximum bid is determined.
- The creative is sent to the publisher’s ad server.
- The sold ad slot displays the advert by the winning bidder.
On average, the whole process takes less than half a second.
What is the difference between Header bidding and Waterfall?
The fundamental difference is that the Header Bidding technology grants equal chances to all the auction participants, whereas when using Waterfall, it is the publisher that determines the priority buyer.
What does it actually mean? The priority is given to direct deal clients. If they haven’t purchased the inventory as a result of the transaction, the next auction participant gets the right to buy the inventory.
What is the main disadvantage of Waterfall? The thing is that publishers set the minimum bid that launches the bidding process. The first advertiser offering a higher bid gets the ad slot. If their offer is lower than the minimum, the next priority advertiser gets the right to buy the slot. The process goes on until the inventory is sold.
It means that this model cuts out a lot of advertisers that can actually purchase your inventory at a competitive price but haven’t been granted the priority status that allows them to take part in the auction. The slot is sold to the first advertiser that offers a price higher than the minimum bid. Besides, the cascade model significantly slows down the website of mobile app operation, which obviously, affects the site’s behavioral factors.
Header bidding advantages for publishers
Here are the reasons why Header Bidding is more beneficial to your inventory than Waterfall:
- Direct cooperation with advertisers, which boosts your sales;
- As a result of fair competition in the course of inventory sales, publishers get to know the real value of their inventories;
- A chance to collaborate with the premium advertisers, which increases the revenues;
- No page overload as it happens in the course of passback requests in cascade models;
- An excellent solution to monetize mobile traffic that makes 65% of all Internet traffic (as of August 2022).
Advantages of Header Bidding for Advertisers
The benefits for marketers are as follows:
- Direct access to publishers;
- Availability of the whole inventory and not only the slots obtained from the previous bidder as in Waterfall;
- Guaranteed purchase of the best ad slot for the best price offered;
- The fast download of ad pages.
It is obvious that Header Bidding is much more beneficial to both parties than Waterfall, as the publishers get the highest bids and the advertisers can choose the inventory, taking into account their ad campaign targeting.
When we talk about the downsides of Header Bidding technology, it is worth mentioning that this module is rather hard to set up. However, the cooperation with Adsgard offsets this disadvantage for publishers as we facilitate a fully automated monetization process. Our team will take care of all the set-up issues giving webmasters and inventory owners a chance not to deal with technical moments.
