Despite the technology involved in the adtech space, there are still many inefficiencies and unfair practices that need to be ironed out. Header bidding is a solution that brings publishers and advertisers together.
What Is Header Bidding?
Header bidding is a process where many advertisers simultaneously bid (in real-time) in a digital auction to win ad space on your website. This auction occurs outside your primary ad server every time your pages load or whenever an ad unit refreshes.
For publishers, the primary advantage is it helps ensure you get the best deals on your ad space. To do this, you must ensure that you reach out to supply-side platforms (SSPs) and other demand partners to ensure you have many advertisers to bid on your inventory.
Header bidding is a more refined way of auctioning off your ad inventory. While it may be a bit more complex to implement than traditional methods (like waterfall bidding), it has many advantages that make it worth the hassle.
How Header Bidding Works
Here’s how the whole process play out when a visitor lands on a publisher’s page:
Each demand partner places a bid on the publisher’s ad inventory
The winning bid is directed to the publisher’s ad server
The publisher’s ad server then connects the user to the advertiser’s server and displays the winning ad
The process may involve several steps, but it takes less than a second from start to finish.
Header Bidding Vs. Waterfall Bidding
One of the most popular methods of buying and selling ad space was waterfall bidding. It has worked pretty well for the past few years, and some publishers are still reluctant to move away from it to embrace header bidding.
The question, however, is which is better: header bidding or waterfall bidding?
To properly understand why it is your better option, we need to briefly look at what waterfall bidding is and its pros and cons.
What Is Waterfall Bidding, and How Does It Work?
Waterfall bidding is one of the earliest forms of programmatic bidding.
Waterfall bidding is an old-school way of ad serving in which publishers set a floor price for their ad space. The publisher sets the priority for each advertiser or ad network they’re connected to.
When selling ad impressions using the waterfall bidding process, inventory is offered to advertisers at a fixed minimum price per impression. The first ad network to bid at that price gets the slot.
Another important aspect of waterfall bidding is that the bidders don’t get to bid randomly. Networks that rank higher, thanks to higher historical yield, get dibs on bidding.
In a sense, waterfall bidding isn’t accurate bidding at all.
The most significant disadvantage of waterfall bidding is that the price you sell your inventory at doesn’t necessarily reflect its true value.
Ad space that remains unsold is passed on to the next ad exchange, determined by size, not the amount of the bid. The process goes on until the inventory is sold. It’s from this cascading nature of passing down inventory that the waterfall method gets its name.
Unfortunately for publishers, this means if the runner-up advertiser was willing to pay more, the publisher misses out on getting more revenue.
9 Reasons You Should Use Header Bidding
You’ve probably noticed a few advantages that header bidding has (for both publishers and advertisers) over other methods of auctioning off ad space.
Some of these benefits include:
1. Header Building Gives Publishers Access to More Advertisers
For publishers, a significant advantage of header bidding is it allows you to expand and diversify the advertisers on your site. It ensures that you’re not reliant on a small set of advertisers. Doing so helps increase your business’ resilience and adaptability.
2. Fair Bidding
One of the biggest advantages for advertisers is that it levels the playing field. That’s because no advertiser has an advantage. All bids are placed fairly, and the highest bidder wins, no matter who they are (and even if they use AdEx).
3. Header Building Improves Auction Efficiency
This type of bidding utilizes real-time pricing instead of the historical pricing used by other ad auction models. This makes it faster and more efficient.
4. Header Bidding Gives You More Control
For publishers, one of the main advantages is it gives you more control over the sources that can participate in the bidding process. As a publisher, you retain control over your site.
5. Increased Revenue
Another reason publishers like header bidding is the increased ad revenue. Not only can you charge more for your premium inventory, but you are also assured that the highest bidder wins every time.
6. Improved Ad Quality
Thanks to the increased competition, advertisers work hard to ensure their ads are high quality and more relevant to a publisher’s audience. Improved ad quality helps ensure a better user experience (UX.)
With header bidding, you rely less on a single supply-side platform. As a result, your overall yield increases due to smarter allocation of impressions and increased fill rate.
8. Increased Fill Rates
One main reason you should use header bidding is that it exposes you to more advertisers. This has the huge advantage of increasing the chances of publishers filling all their ad slots.
9. Better Transparency
Advertisers enjoy the improved transparency that header bidding affords. They have access to all the publisher’s inventory, and thus know what’s available and how much it can cost them. This transparency helps advertisers make informed bidding decisions.
Header bidding has so many advantages for both publishers and advertisers, it’s undoubtedly worth the effort to implement it.
What Are the Drawbacks of Header Bidding?
While this type of bidding might seem like the perfect solution for both advertisers and publishers to maximize their returns, it does have its drawbacks. Here are the main ones:
To run header bidding, publishers have to add a script to their site, which can slow down page load speed, resulting in a poor user experience. Another caveat is that the more advertisers that bid on your inventory, the more the page latency is affected.
Once you’ve set up header bidding, it requires close management to ensure it performs well. Besides ensuring that your code is working well for all your partners, adjusting bids, timeouts, and several other tasks are required to keep your header bidding optimized.
Implementing this bidding style can lead to increased infrastructure costs for SSPs and demand-side platforms (DSPs). One reason for this is the increased load on their servers. Another reason is the required tools and personnel needed to run it.
Header bidding may have its drawbacks, but overall, the pros definitely outweigh the cons.
How to Implement Header Bidding
Implementing header bidding for publishers can be a complicated process. Setting it up is tedious as it may require you to develop countless line items of ad inventory. As said, this can have an impact on your page load speed. The consequences are poor UX for both advertisers and website visitors.
Thankfully, there are a couple of solutions for that: wrappers and server-side.
Header Bidding Wrappers
Header bidding wrappers are code containers that help ensure all auctions start simultaneously and end on time. Wrappers also ensure ads load asynchronously. This means the page’s content can load before the ads, ensuring your website latency doesn’t impact visitors
Another solution is to implement server-side header bidding.
Traditional header bidding takes place client-side (also called browser-side), meaning it depends on the browser to handle individual networks’ requests. Of course, this can put a strain on resources; something header wrappers can help address.
One way to solve that problem is to limit the number of advertisers that can bid for your inventory. However, that defeats the purpose of header bidding, as you want as many advertisers as possible to participate.
Server-side header building is a solution to this problem. Server-side header bidding takes the bidding process off your browser and moves it to an external server.
To do this, you must embed code on the back-end of your website. This way, all the heavy work is transferred from your browser to your ad server. As a result, your browser can focus on the one thing it’s meant to do: serve your website visitors with content.
One of the most significant advantages of server-side is that it helps improve page load times. It also helps ensure a more efficient bidding process.
Whether you’re a publisher or advertiser, you should consider a header bidding strategy.
For advertisers, header bidding levels the playing field by allowing everyone to bid fairly, no matter the ad network’s size.
Publishers ensure their ad inventory sells for what it’s worth. Your primary task is to drive traffic to your website and let the bidding code do the heavy lifting of monetizing your website. With header bidding, you won’t leave money on the table, which is a win-win for everyone involved.
If you need help implementing a header bidding strategy (or even a holistic campaign that incorporates other digital ad strategies), let our agency know. Our team of experts can help!
Have you tried header bidding as a publisher or advertiser?
What was your experience with it?
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According to data released by advertising intelligence platform MediaRadar, spending on podcast advertising was up over 20% YoY in 2021. Q4 ad spend alone was $160 million, making a total of $590 million for the year. It is estimated that more than a third of Americans now listen to podcasts regularly. Technology brands became the biggest spenders, pushing media into second place.
Familiar names among the top 10 highest spending podcast advertisers are Amazon, Capital One, Comcast and State Farm. Most podcast advertising is located midroll with durations of 30 and 60 seconds being most common. Brands seem confident in the effectiveness of podcast advertising, with 79% of advertisers from 2020 continuing to buy in 2021.
Why we care. We say yet again, channels are proliferating. This means fragmented audiences, of course, but also potentially highly engaged audiences. Podcasts create the opportunity for focused contextual advertising as well as for more general brand messaging.
Speaking of messages, consumers (and B2B buyers) are delivering a clear one. Meet us where we are.
About The Author
Kim Davis is the Editorial Director of MarTech. Born in London, but a New Yorker for over two decades, Kim started covering enterprise software ten years ago. His experience encompasses SaaS for the enterprise, digital- ad data-driven urban planning, and applications of SaaS, digital technology, and data in the marketing space. He first wrote about marketing technology as editor of Haymarket’s The Hub, a dedicated marketing tech website, which subsequently became a channel on the established direct marketing brand DMN. Kim joined DMN proper in 2016, as a senior editor, becoming Executive Editor, then Editor-in-Chief a position he held until January 2020. Prior to working in tech journalism, Kim was Associate Editor at a New York Times hyper-local news site, The Local: East Village, and has previously worked as an editor of an academic publication, and as a music journalist. He has written hundreds of New York restaurant reviews for a personal blog, and has been an occasional guest contributor to Eater.
Tristan Silhol, senior manager of consulting at data company Artefact, recently worked with hygiene, health and nutrition CPG company Reckitt to revitalize their marketing campaigns. Their goal was to move Reckitt from a mass-market marketing approach to more personalized customer targeting.
“Typical strategic marketing teams are focused on assumption-based marketing,” he said in his presentation at our MarTech conference. “So, essentially building media campaigns and personalization based on external factors such as consumer surveys, brand knowledge, demographic data, national demographic data, statistical data, and consumption data.”
He added, “This is great to build broad campaigns, but it might not be sufficient when current customers expect a lot of personalization and a certain level of relationship.”
Moving from assumption-based marketing to data-driven marketing is no simple task. It takes a lot of coordination and resources to focus less on external factors and more on individual customer data. But, with the right strategies in place, marketers will have a much easier time adjusting their campaigns.
Adopt data-driven marketing strategies
While “data-driven marketing” sounds like a commonplace tactic, it’s actually a relatively new way of structuring campaigns. Traditional marketing relied on assumption-based strategies to figure out what customers wanted. Now, new marketing technologies allows brands to make decisions based on real-time customer data.
“More and more brands are innovating with data-driven marketing practices, trying to put data at the center of that marketing process,” said Silhol. “What this means is consolidating three types of data, one being first-party data — transactional data, CRM, and other digital assets that you may own as a company. They’re merging this with second-party data from retailers such as Walmart or Amazon. Programmatic technologies are also expanding their reach with third-party data and open-source data.”
“This data-driven marketing piece represents a very large piece of the untapped opportunities for brands, and it requires a lot of capabilities and innovation,” he added.
According to Silhol, CPG companies often have a difficult time translating traditional consumer and market insights-based segmentation into addressable audiences due to lack of a data-driven approach: “Often those companies end up arbitrarily targeting segments online and having this disconnect between what is available in terms of addressable audiences and their marketing segmentation.”
To combat these challenges, Silhol recommends marketers turn to their marketing operations setup to see how optimized it is for analytics and data procurement.
Center digital marketing operations on data and analytics
In the same presentation, Guilherme Amaral of Reckitt discussed how he worked with Artefact’s team to introduce customer data and insights into their campaign automation.
“We started a whole program of digital transformation focused on transforming the way we run digital media campaigns,” he said. “This was just the first step in terms of setting up successful campaigns.”
He added, “We also talked about the right data, the right processes, the right technology, and internalizing some of these capabilities as well.”
Internalization was a major piece of Reckitt’s marketing ops transformation. By internalizing operations, it was able to reduce spend on external measurement tools, centralize customer data, build audiences with its own AI, and measure data independently.
“We ran an assessment, looking at what a few other peer companies were doing,” Amaral said. “In simple terms, we needed to internalize the martech, so we standardized and internalized a lot of our technology. Then we needed to develop technology or capabilities to drive consumer segmentation and audience building — that’s what (Artefact’s) audience engine is.”
Artefact helped Reckitt implement audience management technology to help scale these data-driven marketing efforts.
“It’s about having the ability to centralize first-party, second-party, and third-party data in your data warehouse,” Silhol said. “Then build your audiences, integrate them in your current operating model, and generate insights from those audiences to have that constant test and learn approach. Then you’re able to orchestrate those audiences in an automated fashion.”
With upcoming consumer data regulations, marketers need ways to take advantage of all their customer data, especially if they hope to deliver personalized experiences. Audience management platforms (such as the audience engine), combined with data-driven marketing strategies and operations, have the potential to address this with improved campaign efficiency and personalization.
“We’re studying the foundations of the audience engine and our first-party data strategy,” said Anna Humphreys, who also works at Reckitt, in the same presentation. “They are what we need to prioritize to succeed with the website.”
She added, “We’re still working and evolving because the audience engine has been so impactful for our business.”
About The Author
Corey Patterson is an Editor for MarTech and Search Engine Land. With a background in SEO, content marketing, and journalism, he covers SEO and PPC to help marketers improve their campaigns.
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