At MoPub — and across the adtech industry — there’s constant talk about header bidding and mobile in-app bidding. Not quite up to speed on this topic, or unsure what you need to know? Read on for an overview of how header bidding developed, its transition into the mobile app space, and why it’s valuable today for both publishers and advertisers.
Programmatic advertising is on the rise. According to market research firm eMarketer, programmatic advertising will account for 84.9% of US digital display ad spending (or $59.45 billion) this year, and US advertisers are expected to spend more than four out of five digital display ad dollars via programmatic. Given this growth in programmatic spending, ways to better manage this form of advertising became a major need as publishers aim to streamline and optimize how they sell their ads. As a result, header bidding emerged as a popular and effective practice for publishers to programmatically sell their digital ad inventory. You may still be wondering what header bidding is, and how it can drive revenue. Look no further: here’s a rundown of how it works and best practices you can employ to make header bidding work for you.
What exactly is header bidding?
Glad you asked. Header bidding entered the scene as a viable approach to programmatic advertising. In the desktop world, header bidding allows publishers to offer inventory to multiple ad exchanges simultaneously in a unified auction before making calls to their ad servers. (The name comes from the fact that the code that makes this possible lives in the page header.) This benefits publishers as it gives them the opportunity to run direct auctions, which maximizes the price they get for their ad inventory, and also gives them a say in which ad buyers participate in the sale. In a nutshell, this gives publishers control over their inventory, and helps them bring in additional dollars because they’re getting the best price for their inventory. This also benefits the ad buyers, as it levels the playing field by giving them a fair chance to bid on available publisher inventory all at the same time, instead of in a particular order (known as an ads “waterfall”).
A brief history of header bidding
As eMarketer notes, publishers began using header bidding to sell their digital inventory about four years ago. Previously, programmatic publishers primarily relied on the ads waterfall approach that passed bids from one exchange to the next in a sequential order. Since that time, the state of header bidding has evolved and continues to shift today. Let’s start from the beginning: the practice of header bidding started on desktop, where it was intended to remedy the inefficiencies created by the ads waterfall process (like heavy use of resources and unsold ad inventory.) In the desktop world, auctions that occur simultaneously increase competition, which in turn increase ad value and returns. In fact, according to Digiday research, on desktop, “shifting to first-price auctions and employing header-bidding is helping publishers significantly boost their yield and revenue from programmatic selling. In a survey of over 100 publishers who sell advertising programmatically, conducted by Digiday in November 2018, 88% experienced a lift thanks to header bidding.” According to that same study, “over a third of publisher respondents to Digiday’s survey found that header bidding has increased yield rates by at least 25%. 16% estimated that header bidding has helped boost their yield by 50% or more.” Header bidding on desktop also allows publishers to sell inventory per impression to more clearly understand the value of each impression.
From desktop to mobile: the emergence of in-app bidding
Header bidding took off in the desktop world, but mobile app publishers who have sought to monetize their content with in-app advertising have struggled to find an equivalent solution. Unlike webpages on desktop, mobile apps don’t have a header, so there was no immediate way to translate header bidding for the mobile app world. The growing need to bring the benefits of a unified auction to the mobile app world has led to the latest evolution of header bidding today: in-app bidding. As mobile app advertising moves towards programmatic buying methods on a broader scale, in-app bidding is one way for publishers to increase ad revenue, and can improve access to publisher inventory for ad buyers. In-app bidding:
Increases auction efficiency by moving from historical pricing to real-time pricing.
Improves operational efficiency by simplifying the setup and access path for all parties.
Reduces latency from cascading down the waterfall.
Drives up yield by increasing competition per impression.
Monetizes all impressions by shifting networks to buy based on CPM, not CPI.
In-app bidding to bring in the big bucks
Today, in-app bidding is on the rise. As noted in MoPub’s latest whitepaper on this topic, “mobile app advertising is increasingly moving more holistically towards programmatic buying methods. A programatically-transacted future can capture the upside of great competition while eliminating some of the downsides.” In-app bidding is a gamechanger. It gives ad buyers more access to publisher inventory in real time which fosters competition and helps publishers actually see the highest possible price per ad impression, increasing ad value overall and maximizing share of wallet for programmatic partners involved.
Header bidding revolutionized the way desktop publishers approach programmatic advertising. At MoPub, we’re dedicated to increasing efficiency and effectiveness for mobile app publishers in innovative ways. That’s why we launched our Advanced Bidding solution: the complete reimagination of header bidding for the mobile app environment. It's designed to help publishers more efficiently monetize their inventory by replacing the traditional ad waterfall with simultaneous real-time bidding (RTB) from ad networks and DSPs. As our latest whitepaper demonstrates, Advanced Bidding can be beneficial to publishers for many reasons. First, it allows for a waterfall setup that is easier to manage, making the process simpler and more fair for all involved parties. Next, some publishers who are using our Advanced Bidding product have experienced incremental ARPDAU gains. Not to mention, publishers using Advanced Bidding can take advantage of a monetization management platform that is set up for further success as MoPub onboards additional networks to bidding. Interested in learning more? Get in touch with the team here.