Digital advertising, despite the massive industry built to streamline it, is still plagued by inefficiency and fragmentation. Programmatic selling may mean automation in theory, but it still requires plenty of behind-the-scenes work to connect the buyers to the sellers.
Born out of this reality are techniques such as header bidding, one of the many ways publishers are trying to eke more revenue out of their ad inventory. While the idea has been around for a while, adoption is gaining steam as more ad tech companies create products around it and publishers are looking for more ways to make cash.
What is header bidding?
Header bidding, also known as advance bidding or pre-bidding, is an advanced programmatic technique wherein publishers offer inventory to multiple ad exchanges simultaneously before making calls to their ad servers (mostly DoubleClick for Publishers). The idea is that by letting multiple demand sources bid on the same inventory at the same time, publishers increase their yield and make more money.
“Header bidding is a much cleaner and better tech integration between revenue partners, ad tech companies and publishers compared to what’s going on currently,” said Yieldbot CEO Jonathan Mendez.
Sounds complicated. How is this any better than how things work now?
For publishers, true programmatic efficiency is a bit like alien life: It’s probably out there, but no one’s actually seen it. Instead, publishers have managed their programmatic yield by daisy chaining sources in a waterfall structure: Publishers offer impressions in one sales channel, and if buyers don’t bite, they push them down to other, less valuable channels until someone makes a bid. The system works, but it’s highly fractured and inherently inefficient. Publishers say the system leaves money on the table.
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