Header Bidding vs Open Bidding – What Should You Know!

Updated on: February 23, 2024
Header bidding and Open Bidding are both methods of selling ad inventory, but they work differently. Learn how.

The essence of programmatic advertising can be brought down to two phases: Getting the right value for impressions and appearing in front of the right audience. Header Bidding and Open Bidding are here to offer both. Who’s the winner?

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

Header bidding has an unbeatable place in today’s programmatic advertising because it helps publishers and advertisers trade more optimally and gives them the flexibility they need.

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

What’s the Difference Between Header Bidding and Open 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

Google’s Open Bidding is a server-side unified auction where several ad exchanges and SSPs compete with Google’s Ad Exchange (AdX) to win the impressions, just like header bidding. 

The only difference is that the auction occurs on the server rather than the client. 

Long Answer:

Header Bidding

As mentioned before, in the header bidding process, ad requests from your ad server are sent to several demand partners simultaneously. Each time an ad request is sent, the header tag initiates the auction, collects bids from all demand partners, and then passes the highest bid to the ad server. 

Now, the ad server compares the highest bid with sponsored, direct or programmatic deals and serves the ad creative to the user. Since the received bids are made to compete with the ad server’s demand, it substantially increases your eCPM and revenue.

Open Bidding

Google’s Open Bidding is a server-side unified auction where several ad exchanges and SSPs can compete with Google’s Ad Exchange (AdX) to win impressions, just like header bidding. The only difference is that the auction occurs on the server rather than the client. 

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

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

  • An ad request is triggered, and the information is passed to the GAM ad server.
  • GAM runs a unified auction to determine the best yield
  • GAM selects the best-trafficked line item to compete in the unified auction.
  • It sends a bid request to targeted yield partners.
  • Targeted yield partners run their auction and return their most competitive bid to GAM.
  • GAM hosts a unified auction and selects a winner.
  • A creative is served to the user.

Which One Is Right for You?

Both have their 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, Open Bidding helps you to deal with page latency. As we’ve shifted the auction to the server side, the number of ad requests and wait time can be reduced. But the server takes care of the auction, and publishers have no control here. Here’s a quick overview of their features, pros and cons.

Comparison Open Bidding Header Bidding
Auction Location Auctions happen within the ad server Auctions happen within the user’s browser
Demand Sources Multiple demand sources bid simultaneously Multiple demand sources bid simultaneously
Revenue Potential Lower CPMs and revenue potential Higher CPMs and revenue potential
Page Load Times Faster page load times Can slow down page load times
Control over Ad Inventory Less control over ad inventory Better control over ad inventory
Technical Setup Easier to set up and maintain Requires more technical setup and maintenance

Final Thoughts

Ultimately, these two bidding solutions offer the same advantages: bidding opportunities for the demand partners, better CPMs, and ad revenue for the publisher. 

There are pros and cons to both Open Bidding and header bidding, so the right solution will ultimately depend on what you’re looking for. If you can’t seem to decide between the two, consider them both as options, as they can ultimately coexist within your ad server. 

Fortunately, you’re never obligated to choose one over the other—make the call that works best for your setup, even if it’s called something different. You can always change course in the future if you find yourself wishing you had picked a different solution from the get-go.

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