Header bidding

Header bidding is a programmatic advertising technique used in both web and mobile adtech to help publishers maximize ad revenue.

Essentially, header bidding allows publishers to offer inventory to multiple ad exchanges or demand side platforms (DSPs) simultaneously, rather than following the traditional waterfall or sequential bidding method.

By offering available ad inventory to multiple buyers simultaneously, header bidding helps achieve the best possible prices for ad placements. It also can be faster than traditional methods of ad selection, such as waterfalls.

In short, it opens the door for more competition and, in some cases, gives publishers better control over how much they earn for their ad inventory.

To understand how header bidding works, it’s helpful to compare it to the waterfall method.

Imagine the waterfall method as a set of steps. In waterfall, ad inventory goes to one ad exchange or network at a time, in a sequential list, from the top on down. (Hence the term “waterfall.”).

If the first exchange does not meet the publisher’s minimum price, the inventory moves down to the next one. This continues step by step. This method is simple and forthright, but it can cause publishers to miss higher bids from exchanges further down who might value an ad slot higher than a network asked first.

Header bidding completely changes this process. Instead of taking turns, header bidding has all ad exchanges bidding at the same time.

In general, here’s how it works:

1.  Simultaneous bidding: In header bidding, when a user visits a website or opens an app, the publisher’s header (the top part of the website’s code) sends out bid requests to multiple ad exchanges or demand sources simultaneously. These means that all of them can bid for the available ad impression(s) at the same time.
2. Highest bid wins: Very naturally, publishers want maximum value for their ad inventory. So when all the participating demand sources respond with bids for the ad slot in near real time, the header bidding code selects the highest value bid. Therefore that ad from that winning network gets served on the page or in the app.
3. Better revenue for publishers: While not completely foolproof since there are ways to set up waterfall bidding systems that can also help to maximize revenue, the competition of multiple advertisers bidding simultaneously generally drives up the price for ad impressions. This solves the problem of losing out on potentially higher bids that might, under a waterfall situation, have come later in the sequential process.
4. Reduced latency: In addition, header bidding can be a good thing for end users too, because handling bids in parallel rather than sequentially speeds up the overall process of ad selection and delivery.

Header bidding has also become popular because it helps to level the playing field for smaller ad exchanges and demand-side platforms that otherwise wouldn’t be big or important enough to be written into the waterfall.

However, it can be technically complex to implement, as it requires integration with various demand partners and ad servers.

As you might expect, header bidding in mobile apps works similarly to how it functions on the web but is adapted to mobile applications.

Sometimes known as in-app header bidding or mobile header bidding, it helps boost ad revenue for app developers by allowing multiple demand sources (advertisers, ad networks, DSPs) to bid simultaneously for ad impressions within the app, rather than relying on a traditional waterfall setup.

Bidding, however, is often done server-side, which can reduce latency because it happens server-to-server, rather than on the mobile device itself. That’s often accomplished via integrated SDKs, or software development kits, provided by ad networks or bidding partners.

One challenge here is implementing  this SDK into a publisher’s app.

Publishers have to choose which SDKs to implement, and then also do the work of integrating it. Picking 1 over another can limit choice of available partners or demand sources.

Latency, of course, is even more critical an issue in mobile than on the web, so speed is critical.

Singular is a marketing attribution and analytics tool, not an ad network. So Singular doesn’t offer a header bidding solution.

However, Singular’s advanced ad monetization tools and integrated ROAS calculations help publishers understand both how much they’re making from the ads they sell via header bidding as well as how much is has cost to acquire the users or traffic that generated that revenue.