You have probably encountered header bidding and wonder if this trend is worth your time and attention. In programmatic advertising, it is one of the rapidly developing trends that can make a difference in anyone’s campaign. But, what exactly is header bidding and why publishers should consider it a game-changer?
What is Header Bidding?
Header bidding is not an entirely new concept but a poorly adopted strategy, making it one of programmatic advertising’s most promising innovations. With it, publishers can permit several ad exchanges to bid on their inventory simultaneously, which somehow unifies a publisher’s auction, thereby allowing them to gain from a higher return of investment. Essentially, it gives publishers an efficient option of monetizing their inventory by getting a representative overview of the current market and the ongoing demand.
As such, this innovation is more than a trend. In fact, it presents a viable opportunity that both advertisers and publishers can benefit from. In particular, those who want to compete with tech giants. And this is why header bidding matters.
Changing the Landscape for Ad Exchanges
Before the advent of header bidding, digital sellers would have to find ways on how they can efficiently monetize every ad impression they give to their buyers. One of those ways is to do manual ranking in their ad servers or the use of traditional waterfall model, and those that have the strongest impressions land on the laps of those who can pay the highest price for the given inventory and willing to reserve it before their competitors can.
However, this posed an issue for ad exchanges. Often, ad exchanges have to deal with leftovers after reserved impressions have been used up. To prevent this, most publishers would often sell it at a discount. And this does little to improve the ROI of publishers.
More recently, those who delve into the digital advertising industry are now seeing ad exchanges in a new light, and this has allowed both sellers and buyers to fuel the demand for header bidding as a solution for their needs.
Thanks to advertising technologies, ad exchanges can gain access to private marketplaces. This opportunity allows them to negotiate directly with buyers and sellers. Through header bidding, sellers can quickly unify the building demand for impressions, thus maximizing the potential for revenue. Similarly, buyers are now given a chance to acquire high-value consumers, which they would not have access to if not for header bidding.
By unifying their inventory into one server-side supply (SSP), they have the freedom of selling their inventories on a per-impression basis. This then results in increased transparency in terms of identifying the actual worth of their impressions. Ad exchanges can get rid of the back and forth of their inventory.
Win-Win Opportunity for Advertisers and Publishers
Header bidding is a game-changer in the sense that it allows publishers to benefit from the growing competition of advertisers, which means they have better chances of profiting from them.
Aside from increasing their yields, publishers can also address fill risk by deciding which impressions come with the highest average rate and adjust accordingly. Similarly, header bidding allows publishers to manage and optimize their inventory since they can easily automate the process.
Advertisers, on the other hand, can enjoy the opportunity of growing their market reach by getting access to a publisher’s broader market since they can vie for high priority impressions, and their ads reach more people.
Header bidding allows programmatic consumers to get first dibs on a particular publisher’s inventory, and they can also opt to pay a higher rate for premium ad space, such as a publisher’s landing page.
As we enter the second wave of programmatic advertising thanks to header bidding, the current ad exchange landscape would change, bringing in more effective monetization of digital inventory. When applied appropriately, header bidding can fill in the gap and address inefficiencies that still haunt the programmatic advertising industry.
AlgoriX’s programmatic technology allows advertisers and publishers to benefit from the power of automation to maximize their profit by balancing the needs and requirements of both parties. If you want to know more about our programmatic and mobile advertising offerings, contact us.
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