If you are an advertiser or a publisher you may have heard the term "e;header bidding"e;. The header bidding has become very popular in the AdTech industry. Publishers and advertisers both benefit from it.
In this post, we will discuss what header bidding is, how it works and why header bidding is better than the waterfall technique.
What is header bidding?
Header bidding is a technique in programmatic advertising that allows publishers to monetize their ad spaces with multiple ad exchanges at the same time. Through the header bidding advertiser bid on your ad inventory (ad space) and the higher bid wins. To understand this in simple words let me give you an example.
You want to monetize your website. There are three advertisers who offer you $10, $20, and $30 respectively to put their ads on your website. Which one do you choose? you place the $30 ads on your site. The same goes for header bidding. When you monetize your site with the header bidding ad network, advertisers bid on your site and the higher bid wins. Thus, publishers generate more revenue.
Header bidding vs Google AdSense
Publishers do not make much money with Google AdSense in comparison to publishers using header bidding solutions, why because there is only one SSP (supply-side platform) that is Google AdSense.
Unlike Google AdSense header bidding allows publishers to receive multiple demands from sources like ad networks, SSPs, ads,s, and exchanges. In simple terms, with header bidding, you are connected to multiple SSPs.
Header bidding vs Waterfall
As discussed before, header bidding allows publishers to monetize their ad space with the premium demand. Header bidding decided to place the ads with a higher bid. To buy publishers’ ad inventory, advertisers bid in real-time just like an auction. And the higher bid wins.
Unlike header, bidding waterfall is another technique used in programmatic advertising before the rise of header bidding. In waterfall, the bids are in the queue. For example, the bids are $2.5, $2.78, and $3.5. If you are not satisfied with the first one ($2.5), the second one will be the winning bid. Thus, you lose the higher bid. This is the flaw of the waterfall technique.
Summary
Header bidding is an advertising technique better than waterfall which results in revenue loss for publishers. Header bidding allows publishers to get multiple demands for the ad placement. Publishers could generate higher revenue with header bidding. In header bidding, the highest bid wins.
