What Is Unified Auction? How Is it Different from Header Bidding?

Updated on: February 21, 2024
Explore the extensive guide on unified auction and its difference from header bidding. Top the programmatic game with the right approach for ad selection and website monetization. 

Programmatic advertising is rooted in two vital demands: getting high prices for ad impressions and putting ads in front of the right audience. Header bidding (HB) is a proven way to quench these two demands and gives the publishers a chance to get out of walled gardens.

However, the programmatic industry is evolving and has introduced an approach called unified auction. It is said to improve revenue more efficiently than header bidding. Its arrival induced many questions, like how a unified auction is different from header bidding and which is optimal to use. This blog gives answers to all this. 

What Is Unified Auction?

Unified auction, also called single auction, is an advanced header bidding technology that makes all demand sources (SSPs, DSPs, ad exchanges, etc.) bid at the same time for the ad inventory. It consolidates all demand sources, including direct deals and programmatic demand, into a single auction. This way, publishers always get the highest bid for their ad inventory. 

Header bidding is a piece of JavaScript code embedded in the header section of the website. It is a client-side header bidding performed to call multiple demand partners simultaneously, collect their bids, and then send them to an ad server for final decision-making.

But in the unified auction, it performs a server-to-server auction. The ad server is mostly Google Ad Manager. The server is responsible for every process, from sending ad requests to displaying ads on the site. 

Unlike HB, it makes the guaranteed line items (direct deals, Google AdX) compete with non-guaranteed or remnant line items (open auction) to get the maximum price for ad space. It never misses the chance of getting a maximum price from the open auction that might be higher than the direct deals. 

Nowadays, publishers are even going for hybrid header bidding, which combines header bidding and unified auction. Combining server-side and client-side header bidding, it eliminates the drawbacks of each to get a double advantage. High control and maximum revenue at the same time.

Why Unified Auction?

Unified auction brings certain benefits to your table:

More demand: Unlike HB, it runs a single auction and lets you connect with more demand partners. More demand means more competition, eventually leading to more revenue.

Level the competition: A unified auction levels the playing field between Google and non-Google partners. Third-party demand partners, ad exchanges, and ad networks can compete. You can improve your ad revenue by getting a good CPM price from an open auction, which might be higher than direct deals.

High Value: you get higher demand and high competition for your inventory through a unified auction. Eventually, the higher value of the metrics that improve your bottom line, like eCPM, CTR, and CPAs

Reduced latency:  Since it is a S2S auction, you can reduce page latency to the optimal level. It improves core web vitals and, therefore, user traffic. You can gain loyal users and first-party data, which you can share with buyers for high-targeting advertising.

Plug-and-play approach: A unified auction is a plug-and-play approach. You only need to have a connection with Google Ad Manager; it will take care of the remaining. 

How Does Unified Auction Works?

In a unified auction, Google and non-Google demand partners can participate.  Each demand partner connected to you can bid at the same time. This equality drives high competition and demand and maximizes the CPM price.

  • Whenever a user visits your website, one call from the header bidding setup of your website to the ad server is essential. 
  • The ad server will handle the entire process, from sending ad requests to rendering the winning ad creative on the website. 
  • The server will be connected to more demand networks, which are called yield partners. 
  • After receiving an ad request from the server, each yield partner runs its respective auctions. This happens in real-time as the page loads.
  • They select the highest bidder and send it back to the server. Once all bids are collected, or the timeout is reached, the highest bids, along with the ad server’s own direct sales and other programmatic offers, are sent to the ad server.
  • The ad server then decides which ad to display. It considers the highest bidder along with any other business rules the publisher has set (such as guaranteed deals or private marketplace preferences).
  • Following that, the server renders the winning ad creative on your website.

Unified Auction process

The traditional waterfall solution gives a first look for a few demand partners. So, the publishers will never get the highest price for their inventory. On the other hand, the demands in open auctions will never get the chance to access the premium inventory even when they are ready to pay high. 

Unified Auction Vs. Header Bidding

Often, header bidding and unified auction are used interchangeably. But they are not the same. Header bidding is essentially a hack embedded in the website header to call all demands simultaneously. It typically runs multiple auctions on the client side to fill the ad space for once.

This essential hack is used in the unified auction at the website header to call the ad server once. Then, the ad server does everything in a server-to-serve setup. It consolidates all the demands (SSPs, DSPs, Ad exchanges, Ad networks, and third-party demands) and decides the real winner. 

Since unified auctions run in an S2S setup, the latency is optimal and less than client-side auctions. However, control and transparency are higher in header bidding than unified auction.

The most common ad server used with unified auction is GAM. You just need to add a few lines of code to your site. GAM manages everything from payments and ad selection to reporting. 

Challenges in Unified Auction

There are certain challenges in the unified auction despite the pros it has:

Control and transparency: You cannot control the bidding process, as the server handles everything in and out. So, there is no transparency in the process. You don’t know who is giving high value to your inventory or who is placing ads in your ad slots. You can never know about the real-time data to forecast growth and make plans to achieve more.

Ad fraud: Given the least control and transparency over the process and how ads are visible on the website, unified auction brings the risk of ad frauds that might get low viewability rates. Inappropriate ads might tarnish your values and harm the website’s reputation. 

Getting high value: Managing too much demand and getting high value for your inventory is complicated. Getting the right value without overpaying is difficult in an auction with multiple bids. 

Connection with GAM: Yes, the GAM ad server handles the whole auction process. Even though it is a plug-and-play method, you must register your Google AdX account with GAM. Additionally, you must make your third-party demand partner register with GAM if they don’t have one. 

Lack of expertise: It is technically complex to implement a unified auction as it requires vital development resources and expertise. Also, conducting a unified auction in the GAM has a strict vetting process. It is not a game for small publishers.

So, when you consolidate all these demerits, we can conclude that lack of control, transparency, expertise in the industry, and less qualification to enter GAM are the root causes. 

To overcome this, you can connect with the best programmatic partner who offers a unified auction. Every partner’s solution differs; Automatad’s unified auction solution is unique in many ways. Further follows the details about it. 

Automatad’s Unified Auction Solution

Automatad’s smart unified auction solution is more like a hybrid header bidding. It is structured to rectify the disadvantages of both header bidding and unified auction, which are high latency in header bidding and control and transparency in a unified auction.

The hybrid header bidding solution has prebid header bidding, which is client-side. The JavaScript code is embedded in the header of your website. You will also be connected to demands offered by Amazon’s Transparent Ad Marketplace (TAM) and Google’s Open Bidding. 

The ad request is sent to the demand partners connected to it – Prebid and Amazon’s TAM. Both will conduct their auction with their HB setup and select the winning bid. The collective winning bid from the prebid and Amazon’s TAM will go to Google Ad Manager.

GAM controls the unified auction with server-to-server auction. It is responsible for getting bids from Google open bidding and making them compete with the winning bids from Prebid and TAM.

I know it is confusing, but please check the process flow of the smart unified auction given below.

  • When a user enters a website, Automatad’s smart header bidding wrapper sends out the bid request.
  • Prebid and Amazon TAM conduct auctions and select the winning bid.
  • The collective winning bid from Prebid and TAM is sent to the ad server – GAM.
  • Google Open Bidding then conducts another round of auction. 
  • GAM selects the winning bid from all auctions and sends back the winning ad creative to your website. The ad gets displayed.

Automatad’s effective unified auction solution brings you exemplary benefits.

  • One ad call from your site is enough; the GAM will take over the process, and the latency concern is over.
  • We connect you to 50K+ demands that will increase the demand for your inventory and get high value for CPM, CTR, and CPAs
  • The complex technical setup behind the unified auction is now easy with an expert AdOps team.
  • Troubleshooting is efficient with the expertise that our AdOps team earned by connecting with multiple publishers and experiencing multiple scenarios.

What’s Next? 

A unified auction is the ultimate solution to realize maximum yield. Header bidding paved the way for a unified auction. Both header bidding and unified auction have their merits and demerits, respectively. 

You can choose one based on your objective, like header bidding at the starting level and unified auction after scaling. If you are concerned about the transparency and control in choosing a unified auction, you can consider hybrid header bidding. It runs both client-side and server-side auctions.

Besides control, transparency, demands, and revenue, there are many factors that you can analyze and infer to find a suitable programmatic approach. To dive deep to know what you need and get expert advice, call us now.

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