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Header Bidding vs Exchange Bidding – What Should You Know!

Header Bidding Vs Exchange Bidding
What you need to know - Header Bidding Vs Exchange Bidding.

The essence of programmatic advertising can be brought down to two phrases: Getting the right value for impressions and appearing in front of the right audience. Header Bidding and Exchange Bidding are here to offer both. Then, who’s the winner – Header Bidding Vs Exchange Bidding? 

We’ve come a long way from the days where the publishers and advertisers relied completely on Google to monetize their inventories.

In fact, Header Bidding has its unbeatable place in today’s programmatic advertising not only because it helps publishers and advertisers to trade more optimally, but also it gives them the flexibility, they needed to realize.

Of course, Google and Facebook duopoly can’t be chipped away just by Header Bidding. But, it’s a key hack that will have its place in the adtech. Keeping the future of Header Bidding aside, we’ll try to focus on Header Bidding Vs Exchange Bidding in this piece.

We’ll discuss what they are, how they work, and what are the differences between the two bidding technologies. 

Header Bidding Vs Exchange Bidding

Header Bidding

Header Bidding or Pre-bidding is an advanced programmatic technique where you can open your inventories to several demand partners, before sending the call to the ad server. It allows you to receive bids from the global ad exchanges and DSPs for your inventories, which aren’t available through the primary ad server and ad exchange.

Header Bidding

The received bids are made to compete with the ad server’s demand. Thus, increasing your eCPM and revenue substantially.

Why should you implement header bidding?

To avoid:

– Waterfall Setup of Ad server and

– Google AdX Privilege.

Avoiding them yield better revenue and put everyone on the same foot. Need to know more about the ‘Waterfall’ and ‘Google AdX Privilege’ and why you should avoid them? Take a look at this definitive guide. As a result of header bidding, publishers have seen improved ad revenue without increasing the number of ad units.

As per AdZerk’s latest header bidding report, close to 80 percent of top 1000 sites that use programmatic to sell ads use ‘Header Bidding’ to monetize their inventories. The adoption rate is gradually increasing for the last few years. 

Header bidding adoption 2019

Even though header bidding increases the revenue by up to 60 percent, publishers need to partner with the right companies (SSPs) to get the results. 

At Automatad, we offer header bidding wrapper for mid-market and premium publishers and ensure ad quality and superior user experience at all costs. In case you are looking to explore more on header bidding and 0ptimization, reach us at automatad.com.

Exchange Bidding

Google’s 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 only difference is, the auction takes place on the server-side rather than the client. 

Exchange Bidding

To be frank Exchange Bidding was a counter punch by Google to Header Bidding vendors. Google even dropped its last look advantage in EBDA to make itself more friendly.

Note: Exchange Bidding has been renamed Open Bidding recently.

The main difference is, the auction will be happening inside DFP (ad server), not on the users’ browser. Here’s how the process looks like:

1. An ad request is triggered and the information is passed to the DFP ad server

2. DFP runs a unified auction to determine the best yield

2a. DFP selects the best-trafficked line item to compete in the unified auction

2b. DFP sends a bid request to targeted yield partners

2c. Targeted yield partners run their own auction and return their most competitive bid to DFP

2d. DFP hosts a unified auction and selects a winner

3. A creative or Mediation list is returned to the publisher

– Google.

Which One is Right for You?

Both have their own pros and cons. For instance, Header Bidding will be completely transparent and can be managed or customized by publishers. And, with the availability of Open source header bidding technologies like Prebid, it has become much easier to implement and execute header bidding.

On the other hand, Exchange Bidding helps you to deal with Page latency. As we’ve shifted the auction to server-side, the number of ad requests and wait time can be reduced. But, Server takes care of the auction and publishers have no control here. Google doesn’t allow PMPs and decides the buyers who can compete with AdX. Adding to this, adtech vendors are expected to pay a fee or tax to Google for participating. So, it is still under question whether publishers and buy-side platforms or Ad Exchanges are going to use Exchange Bidding. 

What’s Server-Side Header Bidding?

Server-Side Header Bidding was developed to execute header bidding on the server rather than using browsers. This, in turn, reduces page latency and frees up the limit implied on publishers (In Client-Side Header Bidding, Publisher can add up to 7 or 8 demand partners. If the count exceeds, page latency will be high). However, publishers and advertisers face an issue with the match rates in this technique.

Conclusion

There’s no single method with no drawbacks. It’s up to you to decide and execute the right solution. So far, OpenX is the noticeable one to publicly state that the revenue has been increased while using Exchange Bidding (in Beta). If you’re a mid-range publisher, you need a transparent solution where Exchanges and SSPs can integrate with you for free. After all, we’re talking about a few extra milliseconds load time in header bidding. If you’re a premium publisher, then you can consider implementing it on the Server-Side. 

Automatad Team

At Automatad, we help publishers to monetize better without hampering the user experience. Our products are live across hundreds of publishers, earning them incremental ad revenue with every passing second. You can request a free audit to get an estimated revenue uplift today.

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