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Header Bidding Vs EBDA
‘Header Bidding’ is a programmatic technique applauded by both publishers and advertisers for its transparency. Publishers have experienced a steep increase in their revenue while advertisers were able to bid on the available impressions simultaneously (even before Google AdX) with the help of header bidding.
But header bidding isn’t the only one promising unified auctions and increased revenue for publishers. Google introduced ‘Open Bidding’, a server-side technique to directly compete with header bidding.
Now, publishers are compelled to pick the right one. And, it’s easier said than done. So, we’ve prepared a definitive Q&A guide to help you decide a suitable solution.
Header Bidding
Header Bidding or Pre-bidding is an advanced programmatic technique that helps publishers to open up their ad inventories to several demand partners simultaneously, before sending the call to the ad server.
Technically, there will be a pre-auction on the header. This method was primarily developed to deal with the ‘waterfall inefficiency’ and to address the ‘AdX privilege’ in Google Ad Manager.
- Waterfall – In this method, a publisher will pass his/her inventories from one ad exchange to another, until they’re sold. As the inventories are cascading down from one buyer to another, the price will also be reduced. In other words, publishers will be losing money on the table when they implement the waterfall method in DFP.
- AdX Privilege – Google Ad Manager, the world’s most used ad server, uses dynamic allocation to have a “last look”. This means it can see the bids from other exchanges and bid last to win the impression. Update: Google dropped its “last look” privilege later.
So, how can you decide whether the header bidding is right for you or not? Here’s a series of questions you should go through before settling on a decision.
Is header bidding transparent?
Header bidding is by far the most transparent programmatic technique and publishers will have complete control over the auctions. They can see who bids what, and auction results, and more.
Does header bidding cause latency?
When the setup was done properly and optimized, it doesn’t increase the page load time considerably. However, when you implement header bidding a slight increase in page latency is inevitable.
What is the Industry-wide adoption rate?
Header Bidding has grown into a well-known hack among publishers. As per ServerBid’s latest header bidding report, more than 70 percent of Alexa’s top 1000 sites use ‘Header Bidding’ to monetize their inventories.
Besides, all the major ad exchanges and DSPs have been participating in header auctions.
Do ad exchanges have to pay a fee to participate?
No, header bidding is open for all exchanges and doesn’t involve any taxes. In fact, a publisher can use an open-source header bidding solution like prebid to set up header bidding in-house and then, get the demand partners to bid.
Who will pay the publishers?
The bidder partners will pay the publishers every 2 or 3 months (60 days or 90 days) based on the number of impressions.
Is there any need for development?
Yes, to implement header bidding on any site, development will be required. A dedicated AdOps and a development team are recommended to deal with header bidding setup, line items creation, etc.
Are there any geographic restrictions?
No, bidders can allow all of their demands to avail of the impressions from the publishers. Thus, the competition is relatively high in header bidding.
Is the cookie matching rate higher than the open bidding?
Yes, header bidding offers the best cookie match rates. As all the demand partners are allowed to bid directly on the client-side, it is relatively easy to sync the cookie data with their own DMPs (so, the probability of cookie slipping is greatly reduced.)
Is it open for all the publishers?
Yes, it is. Any publisher can set up header bidding on the site and start plugging in-demand partners with the help of an SSP. Publishers can either utilize an open-source solution or try the header bidding wrapper from a third party.
Open Bidding
Open Bidding (formerly known as Exchange bidding) is a server-side unified auction where several Ad Exchanges and SSPs can compete along with Google’s Ad Exchange (AdX) to win the impressions, just like header bidding.
The main difference is, the auction will be happening inside Google Ad Manager, not on the users’ browser. Here’s how the process looks like:
- An ad request is triggered and the information is passed to the Google Ad Manager.
- GAM runs a unified auction to determine the best yield.
2a. Ad Manager selects the best-trafficked line item to compete in the unified auction.
2b. GAM sends a bid request to targeted yield partners.
2c. Targeted yield partners run their own auction and return their most competitive bid to Google Ad Manager
2d. Ad Manager hosts a unified auction and selects a winner
- A creative or Mediation list is returned to the publisher.
– Google.
Let’s see how Open bidding competes with header bidding.
Is open bidding a transparent solution?
No, it isn’t a transparent solution. Open bidding sweeps off the auctions from the publishers and locks it inside Google Ad Manager. Specifically, Google doesn’t disclose the logic behind its ‘enhanced dynamic allocation’, data around per-impression bids, Private Marketplaces (PMPs), etc.
Does open bidding cause latency?
No. All the auctions are shifted completely to the ad server and only a single call will be made from the client (browser) to render the ad creative. So, page latency is reduced in open bidding.
Do ad exchanges pay a fee to participate in open bidding?
Yes. As the adoption grew, participating demand partners expected to pay a fee of 15% to 20% to Google. For instance, if the winning price (from the auction) is $10, Google will take $2.
Who pays the publishers?
Google pays the publishers every month.
Is there any need for development?
No, there isn’t any need for development. But a publisher should handle the server-side setup and optimization processes.
Are there any geographic restrictions?
Yes. Open bidding doesn’t allow demand partners to open all of their demands to the publishers. There are some restrictions.
Is the cookie matching rate higher than the header bidding?
No. It is lower than the header bidding. There’s no clue about the exact percentage. As you know, when you move the bidders to the server, they need to sync cookie data within the server. This causes more slip and reduces the match rate.
Is it open for all the publishers?
Yes, it is available for all the publishers.
Conclusion
Without a doubt, both have their own pros and cons. As a publisher, you should be looking for a transparent solution that also provides better UX.
One way is to go with hybrid header bidding (client-side header bidding and server-side header bidding) and another way is to implement optimized client-side header bidding. If EBDA grows into a transparent one with no additional taxes, the adoption rate will grow. Ultimately, it is up to you to assess and settle on a solution based on your KPIs.
