Header Bidding

William Chen

What is Header Bidding?

Header bidding is an advanced publisher ad stack setup method that arose as an alternative to Google’s traditional “waterfall” method of ad serving. It allows publishers to call a multitude of partners on the header of the page, before the rest of the page even loads. The big benefit of header bidding is that it allows publishers to simultaneously auction off their inventory instead and move closer towards a true auction-based environment.

How is Header Bidding Implemented?

On the engineering side, the prebid.js code must be implemented onto the publisher page by the engineering team. The exact details of this goes beyond the scope of this article, but engineers can refer to this link to get started:

http://prebid.org/dev-docs/getting-started.html

  1. Decide on price bucket granularity. You can set up price buckets with up to a penny in granularity. More granular setups take more time but they provide a more exact bid value from the bidders.
  2. One set of line items for all bidders or a set of line items for each bidder
    1. One set of line items for all bidders. This is a lot easier to maintain as there are only 3 keys to look after.
      1. Default Key Scope Description Example
        hb_pb Required The price bucket. Used by the line item to target. 2.10
        hb_adid Required The ad Id. Used by the ad server creative to render ad. 234234
        hb_bidder Required The bidder code. Used for logging and reporting to learn which bidder has higher fill rate/CPM. rubicon
    2. One set of line items for each bidder. This setup requires keeping track of more default keys but it allows you to conduct line item reporting, see a bidder landscape, and to set up more keyword targeting within the ad server.
      1. Default Key Scope Description Example
        hb_pb_BIDDERCODE Required The price bucket. Used by the line item to target. Case sensitive and truncated to 20 chars. The BIDDERCODE is documented at Bidder Params. hb_pb_rubicon = 2.10
        hb_adid_BIDDERCODE Required The ad Id. Used by the ad server creative to render ad. Case sensitive and truncated to 20 chars. The BIDDERCODE is documented at Bidder Params. hb_adid_longBidderNa = 234234
        hb_size_BIDDERCODE Optional This is not required for adops. Case sensitive and truncated to 20 chars. hb_size_appnexus = 300x250
  3. Confirm that setup matches with your dev team. You want to especially make sure that the price buckets match up.

How does Header Bidding Work?

To understand how header bidding works, we must first understand the traditional waterfall format.

Traditional Ad Server Waterfall

Direct Orders > RTB Auction > Fallback Inventory

In a traditional waterfall, the line items with the highest priority would get first look at the inventory. These partners get priority because they pay a higher cpm for the inventory. If a partner declines the inventory, it would move down to the next stage in the waterfall. As we move the waterfall, we inevitably receive lower cpms from the partners down the chain.

Header Bidding

Header Auction > Direct Orders > RTB Auction > Fallback Inventory

A header bidding auction is conducted on the header of the page among the demand partners that have been placed there, before the rest of the page even loads. Now we have the winning bid from the header bidding auction compete with the partners from the traditional waterfall.

What are the Benefits of Header Bidding?

  • Publishers have increased control over who bids on their inventory and the bidding structure.
  • Publishers increase competition with more of a true auction. This leads to a higher winning bid and overall more revenue for publishers.
  • Reliance on a single SSP decreases, and publishers are able to increase fill rate with the increased bids.
  • Discrepancies will be reduced as there will be fewer steps in the waterfall. With fewer steps, there are fewer opportunities for drop offs, etc.
  • Advertisers can benefit from a higher chance to win inventory. Many times they may be at the bottom of the waterfall and not see the impression.
  • Header bidding increases transparency by allowing advertisers to see each impression opportunity that goes out, although some publishers may dislike this.

What are the Drawbacks of Header Bidding?

  • Header bidding can be both time consuming and complicated to set up.
  • Header bidding may increase latency with auctions happening on the header of every page.
  • Infrastructure costs are increased for SSPs and DSPs as they are now able to see the same impression twice.
  • Publishers enjoy a first price auction between all partners, but they are limited to the second price auction mechanics by all the bids. For example, if one DSP passes a $10.01 value with a highest bid of $20, another DSP that passes a $12.01 value with a highest bid of $15 would win. In this situation, the DSP that had the $20 bid should have won, but this is not the case.

Server Side Header Bidding

Server side header bidding is a new alternative to the traditional waterfall method that aims to correct some of the issues of traditional header bidding. This means that the publisher will only call one SSP on the header which will integrate with all of the other SSPs on the server, outside of the user browser. Benefits of server side header bidding include:

  • Eliminates the fragmented win scenario where the highest bid may not always win.
  • Reduces page latency.

Google Exchange Bidding Dynamic Allocation (EBDA)

As a response to the ever increasing adoption of header bidding and to provider their own server side header bidding solution, Google has rolled out their EBDA product.

Sources

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Published by William Chen