What is Header Bidding and How has it Shaken up Digital Advertising?

To understand header bidding, it is important to understand how ad space on a website is utilized. First and foremost, the ad space that is available on a website is used for the ads that have been sold by the website owner to interested parties on their own, which is why these ads are called direct-sold ads. Second, the remaining ad space is then made available to interested parties through an ad server such as DoubleClick For Publishers (DFP). Using the waterfall sequence, the remaining ad space is offered to a succession of ad exchanges from the top-ranked to the bottom-ranked so long as there is still space that needs to be sold.

Unfortunately, just because available ad space is sold on the ad exchanges from the top-ranked to the bottom-ranked, it does not mean that the website owner can expect to receive the best price for it. After all, ad exchanges are ranked by using factors such as buying volume, which has nothing to do with the price that is offered for the available ad space. Combined with the fact that interested parties can use Google’s ad exchange to benefit when using Google’s ad server, it is no wonder that some website parties are not satisfied with the waterfall sequence, thus contributing to the rising interest in header bidding.

Simply put, header bidding is a process that website owners can use to solicit bids from all of the ad exchanges out there. This is critical because it enables them to get a better price than otherwise possible by checking with a wider range of interested parties than otherwise possible instead of remaining reliant on the waterfall sequence. In fact, website owners can even choose to let interested parties compete for ad space at the same time as their direct-sold ads, which can provide even further benefits along this line. As a result, it is no wonder that header bidding is becoming popular with website owners, while Google has been much less enthusiastic about the whole process.

What Are the Benefits and Costs of Header Bidding?

Theoretically, header bidding can benefit both the people who are making ad space available to interested parties and the interested parties who want to buy up that available ad space. As mentioned, website owners benefit by being able to secure better prices for what they are willing to offer. However, it should be noted that they can get a better idea of what is going on with their ad space as well, which can enable them to improve their capitalization of their available ad space for even better results in the long run so long as they are willing to put in the effort needed for proper analysis. On the reverse, parties that are interested in ad space benefit by being able to access a wider range of prime ad space, thus enabling them to get their messages out to their intended audiences in a more effective and more efficient manner.

With that said, Google has pointed out that header bidding uses up a lot more computing power because it is much more complicated to run than the previous model. As a result, it makes loading a particular webpage that much slower, which in turn, makes it that much likelier that its visitors will just bypass the problem by installing an ad blocker. After all, people are less than fond of ads that ruin their user experience when visiting websites, meaning that there is a potential for header bidding to backfire in a way. Furthermore, there are some website owners who have become used to the previous model, meaning that they might not want to put in the time, the effort, and the other resources needed to become as proficient with header bidding. Change does not come for free, meaning that there is always a cost even when following through with a change promises to provide excellent returns.

What Can Be Expected from Header Bidding?

Header bidding has become popular because it provides genuine benefits to those who can make the right use of the process. Furthermore, it is being helped along by a real sense of frustration with the previous model, meaning that it has made more progress because of said factor than if it had been left alone on its own merits. As a result, interested individuals can expect a couple of things. First, header bidding will continue to become more popular as time passes. Second, Google and other interested parties are bound to make changes of their own as this trend persists, whether to strengthen their position in the market or to protect their position in the market from those seeking to strength themselves. Suffice to say that the whole thing promises some interesting times ahead in the field of digital advertising.

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