Header bidding is on the rise, and it has seen a dramatic rate in adoption among publishers in 2015, with “as many as 24 percent of the top 1,000 domains have header tags on their page,” according to Randall Rothenberg, president of the IAB.
Header Bidding Explained
Header bidding was introduced as a way for publishers to bypass the inefficient waterfall model used in programmatic advertising. In this traditional waterfall approach, demand partners are prioritised based on their perceived value, with the main drawback being reduced competition and the artificial limiting of publishers’ revenue.
With the new header bidding approach (also called pre-bidding, holistic yield management or advance bidding), a single auction takes place where all demand sources bid alongside each other, rather than sequentially.
Benefits and Drawbacks
The main benefit of header bidding is higher yield. “Some publishers cite 200% to 300% increases in yield after they begun using header bidding,” says Tobi Elkin, staff writer at MediaPost. Some other benefits for publishers are: (1) no more need for passbacks, (2) flattens waterfall, (3) reduces discrepancies and (4) improves yield management.
It’s clear that publishers have much to gain from header bidding, but what about advertisers?
According to Ad Ops Insider, header bidding gives buyers a better sense of reach for any given publisher, since it allows demand partners to see how much inventory is really available—including publisher’s direct sold campaigns. With tag based integrations, this is not possible.
This new technology does not come without its drawbacks. Aside from being complicated to setup and implement, header bidding can negatively impact page load times. This is a big risk since it is a well-known fact that an increase in page load time dramatically decreases user engagement.
The Future of Header Bidding
“Header bidding will continue to evolve in 2016 and drive growth in revenue and innovation across the industry,” says Tim Cadogan, OpenX CEO, in an interview with ExchangeWire.
Despite the growing adoption of header bidding, the technology is still “unstandardized and lacks industry guidance,” says Randall Rothenberg, IAB’s CEO. This is why the IAB Tech Lab is currently evaluating header bidding and is working towards developing an open source header tag JS code. The IAB will continue to develop guidance in this area through Q1.