This article was first published on The AdEx Blog - Medium
You may have heard about header bidding — but do you know exactly what it does and why we use it? We’re here to explain.
Let’s start with a simple explanation of header bidding (also known as advanced, or pre-bidding): it’s a programmatic advertising technique, which allows publishers to offer their inventory to multiple advertisers simultaneously before even the ad server is called. It all happens in the header of the webpage (hence the name). Because the process happens automatically and to all advertisers at the same time, it guarantees the best price for the inventory. Header bidding not only increases the revenue for publishers, it also offers premium inventory for the advertisers. Basically a win-win scenario!
So how does header bidding work?
When a page begins to load, the visitor browser would call all the demand partners (advertisers) at the same time and ‘ask’ them how much they are willing to pay for the available ad slot(s). They each make a bid and the system automatically picks up the best bid based on price and targeting. In simple words, it’s an automated auction which happens in seconds in the background.
Header bidding was developed as an alternative to waterfall auctions — namely offering the inventory to the highest bidder first, then second highest etc. until it is finally accepted. Waterfall auctions aren’t exactly favourable to publishers. The first reason for this is, they are not able to choose who to work with. Then, these auctions lower the value of the inventory by passing it further down the ‘waterfall’.
Header bidding, on the other hand, gives a chance to all advertisers to bid at once. This means that publishers get a better price for their available ad space, and advertisers can get premium inventory previously reserved for the select few on top of the chain.
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The AdEx Blog - Medium