6 min read

What is Header Bidding and How Does it Work?

Innovation often arises from necessity, and 'Header Bidding' is a prime example. Web pages typically contain various components and ad placement locations, including sidebars, footers, etc.

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Written By
Angela Oladipupo
Published on
5/10/2023

What is Header Bidding?

Header Bidding is a real-time bidding programmatic infrastructure that enables publishers to monetize their content with multiple SSPs simultaneously in seconds. More popular Header Bidding solutions would be Prebid and Amazon Publishing Services (divided into Unified Ad Marketplace and Transparent Ad Marketplace). 

How Does Header Bidding Gain Traction?

In 2014, the idea of header bidding was first conceived, and by 2016, it had gained significant traction. Its popularity skyrocketed after The Telegraph, a British newspaper, reported a remarkable 70% surge in programmatic revenues upon implementing header bidding.

According to a Statista report, header bidding was utilized by approximately 70% of online publishing websites and 16% of the top 100,000 U.S. websites in the first quarter of 2022.

a graph displaying how programmatic advertising has grown over the years

Previously, programmatic advertisements were implemented on the page through “waterfall,” meaning the position on the page was first offered to one partner. If they did not respond, it was provided to the second and the third until the ad placement was filled or left blank. While this method is still sometimes used in certain cases, the ability brought by header bidding to call on all bidders at once vastly improved website speed and monetization opportunities. 

How Does Header Bidding Work?

Header Bidding includes a script that is run in the header of a website, which then recognizes all the ad units ran on the page and creates auctions, asking for bids from multiple partners to see who can offer the most for the ad placement. The winning bid is then sent to an ad-serving solution, such as Google Ad Manager, which may try to outperform or serve it. 

Let's use Boonsmedia.com as an example to understand the process further:

Step 1: The publisher adds a line of JavaScript code to Boonsmedia.com's website header.

Step 2: A user visits the website's URL.

Step 3: A prebid.js script loads in the page's header. Another header bidding solution in the form of Amazon TAM is often run alongside it. 

Step 4: The script sends ad requests to multiple Supply Side Platforms, asking them to bid on the available ad inventory. They, in turn, transfer the bids to Demand Side Platforms, which choose whether they want to reply with the value they are willing to pay if they win the auction. Bid requests are made by the user's browser (Client-side integration) or a server (S2S integration). 

Step 5: The wrapper script selects the highest bid once all bids from header bidding partners are in. Then this bid is transferred to Google Ad Manager (or other ad servers) as a key-value pair mapped to a corresponding price priority line item. 

Step 6: The Ad Server then checks what other types of campaigns there are, and decides whether to fill in with a direct or a sponsorship campaign, or to run an auction, considering line items with price priority (ones from Prebid and Amazon, but not only), and build in Open Bidding and AdX demand. The highest bidder wins the impression.

By allowing multiple advertisers to bid simultaneously, header bidding increases competition for ad inventory, leading to higher bids for publishers. In addition, this process occurs in the web page's header before fully loading, resulting in a higher chance of getting a higher CPM.

various elements bidding during an ad auction

What is ​​Header Bidding Wrapper?

Header Bidding Wrapper is often referred to as a custom iteration over the core prebid.js code that fits extra functionalities for ease of implementation, such as controlling how the ads are refreshed, whether they are lazyloaded, etc.

It’s quite popular with services that provide access to programmatic demand for small and medium publishers. The publishers usually lack the direct deals they need with SSPs and the technical know-how to implement an optimally working ad stack.

As the implementation process might be time-consuming and challenging for publishers and requires a good understanding on both the dev side and the AdOps side – many websites choose to hand over the implementation to such services.

Of course, there are also ad stack services, such as Yield Manager, which allow publishers to utilize the powerful features of a constantly updated ad stack, utilizing industry best practices while keeping full control over their ad stack and utilizing their demand relationships.

What Is a Prebid Adapter?

A Prebid Adapter is the extra code you add to your Prebid setup responsible for passing the bid to a specific SSP. Prebid adapters may also add extra functionality, such as UserId providers or analytical tools.

Benefits of Header Bidding for Publishers

Header bidding offers publishers the ability to sell their non-reserved inventory in real-time to multiple networks of advertisers, picking the highest value. 

Transparency is also improved since publishers have control to optimize their ad stacks and can sell ad space on an impression basis to see its worth.

Header bidding eliminates the need for passback, reducing the wastefulness of lost impressions and decreasing latency. Publishers can maximize their ad revenue with improved CPMs and revenue growth, especially when monetizing their premium inventory.

Moreover, better yield is achieved as publishers are not solely reliant on direct demand and can sell their ad space on a per-impression basis more easily. 

an illustration demonsstrating the benefits of Header Bidding

How Does Header Bidding Help Advertisers?

Header bidding provides advantages for both publishers and advertisers. One of the main benefits for advertisers is increased access to a publisher’s ad inventory. With header bidding, buyers can bid on available ad impressions on a publisher’s website through various DSPs. This provides more opportunities to reach their target audiences and achieve their campaign goals. Additionally, header bidding offers more data for DSPs, which can be used to improve advertising campaign results.

Another benefit for advertisers is improved forecasting. With header bidding, advertisers can more accurately forecast their ad spend as they can access a more constant inventory over more extended periods.

Header bidding provides transparency for media buyers. Buyers can review the publisher’s impressions and other statistics directly from the source before making programmatic ad purchases, ensuring they make informed decisions.

The most significant difference between header bidding and traditional digital media planning between agencies and publishers is that you don’t have to deal with many salespeople and create specific deals for each in a programmatic world. And advertisers can be more focused on finding the right person to show their ad instead of finding the correct medium.

How to Set Up Header Bidding?

A publisher must have inventory to optimize on, an ad server with the correct line item setup, a direct relationship with SSP partners or one with an SSP reseller, and the tech stack – either a custom prebid.js integration or a form a header bidding wrapper and the know-how to put all of this together. 

Establishing and maintaining a consistent connection between the header bidding wrapper, Ad Manager, and adapters is essential.

To set up header bidding, a publisher must complete the following steps:

Implement the header bidding code on their website. This code must be added to the header of the publisher’s webpage and generally includes the names of the ad exchanges, SSPs, and ad networks that the publisher desires to work with.

Test the header bidding setup to verify it's working correctly and receive bids from the ad exchanges.

You can also make your life easier by going for a proven full ad stack solution, such as AY Prebid Wrapper, with a UI and a lot of flexibility from a dev perspective while keeping in place your direct relationships with SSPs and full control of your website

Related Features:

Yield Manager
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