This guest post is written by Andrew Buckman, Managing Director UK, OpenX
With 53% of premium publishers already using the technology, header bidding has become one of the most talked about topics in the programmatic advertising world, but what does it mean for marketers?
It is easy to see why header bidding is popular with the sell side. As a technique that allows publishers to offer their inventory at the fairest price, it increases competition, which enables them to boost fill rates and maximise yields. It also allows them to assess the true value of their inventory; but header bidding also has benefits and wider implications for those on the buy side.
When it comes to digital, marketers want full visibility into all available advertising inventory, and the ability to purchase it at the fairest price via their channel of choice – and header bidding has arrived to offer just that.
So how exactly does header bidding work, how can it help marketers enhance their advertising strategies, and are there any negative implications?
Also known as advanced bidding or tagless implementation, header bidding works by placing a piece of code in the header of a publisher's page that calls a demand partner, such as an ad exchange, before the page loads and is answered with the results of a real time auction. The winning bid is then sent to the publisher's primary ad server and the accompanying creative is displayed if it is chosen by the ad server. This has a number of benefits for marketers:
Increased transparency in the market
Marketers frequently struggle to comprehend the reach of any given publisher as inventory can be sold via numerous different methods such as direct sales or non-guaranteed demand sources like networks or exchanges. Even within these methods, the traditional waterfall approach means demand partners are fragmented from one another and are invited to bid in order of implementation, making it difficult to gain a full understanding of available inventory.
Header bidding increases transparency and enables marketers to gain a wider understanding of the inventory available as it generates a bid request for each and every individual impression. This gives marketers a full picture of all inventory on offer – from remnant to premium – allowing them to maximise scale and to access the ad space that will most effectively reach their target audience.
A first look at publisher inventory
Header bidding provides the unique opportunity for advertisers to get a first look at a publisher's inventory in an RTB environment. This allows marketers to buy only the impressions they want, and to submit bids knowing the specific page on a site where the ad will appear as well as the target audience who will visit the page.
Header bidding works in conjunction with a variety of trading environments, including private marketplaces. For advertisers the combination is an exciting prospect as it brings together private marketplace capabilities with 100% of publisher inventory — some of which would previously only be available to direct clients. Buyers now have the opportunity to use header bidding and RTB to compete with direct-sold campaigns.
Access across multiple marketplaces
With header bidding making inventory simultaneously available across a range of marketplaces, buyers can choose which channel they want to use to purchase impressions. However, they do need to be careful they don't end up bidding against themselves when an impression becomes available across multiple platforms. Choosing the right demand partner on the basis of their quality guidelines can help avoid this.
Impact of header bidding on latency
Aside from the risk of bidding against themselves for the same impression, the only other potential downside of header bidding for marketers might be a short-term decrease in viewability. If publishers deploy too many header tags on their sites this can cause latency issues, resulting in users abandoning the web page as the ad loads.
To prevent header tags impacting load times publishers can limit the number of demand sources they issue bid requests to – inviting only the most profitable – or they can use server side solutions that remove the main causes of latency, so this isn't an insurmountable problem. It may be that by eliminating the waterfall process header bidding can actually reduce website latency, improving viewability.
Ultimately marketers want access to all available advertising inventory and the ability to purchase it at the fairest price via their channel of choice, and header bidding can fulfil these requirements. As adoption of the technology by publishers continues to rise marketers should ensure they partner with providers such as ad exchanges that make use of header bidding, and should use it to enhance their marketing strategies.