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Header Bidding adoption has swept through the digital publishing industry over the last few years, giving publishers an effective way of boosting revenue without adding additional inventory. In response to the rise of Header Bidding, Google introduced Exchange Bidding, or EBDA – Exchange Bidding via Dynamic Allocation. On the surface the two solutions look similar: Both Exchange Bidding and Header Bidding allow multiple demand sources/exchanges to bid on an impression in a single auction. There are differences though and many publishers are now weighing up the advantages of each: Exchange Bidding vs Header Bidding.
Advantages of Exchange Bidding
Exchange Bidding allows other exchanges to compete with AdX and other line items in a unified auction within Google Ad Manager (formerly DFP). Everything runs server-side, taking advantage of Google’s infrastructure. Publishers (or their monetization partners) still need direct relationships with each competing exchange, but Google handle reporting, billing and payments.
No additional scripts to download
Exchange Bidding runs on the DFP servers, which means no additional JavaScript to be loaded for each user (Header Bidding and Exchange Bidding both load the DFP scripts, but Header Bidding also requires additional script). That speeds up page loading and reduces data consumption, which is good for all users, but particularly those connecting via mobile devices.
Reduced latency
In addition to needing to load JavaScript, Header Bidding also waits for each partner to return a bid (or time out) before calling DFP. Exchange Bidding also requires each partner to return a bid, but this happens server to server within Google’s infrastructure, meaning that it happens more quickly. Faster responses mean getting ads served and pages loaded more quickly.
Google manages all payments
Whichever partners you use in your Exchange Bidding set-up, payment is made by Google. That not only means simpler accounting but fast reliable payments too. Payments are made to publishers on Google’s usual payment schedule. With some demand partners taking more than 90 days to pay directly, that “Net 30-ish” turnaround from Google can bring real cash-flow advantages.
No development required
As Exchange Bidding is all handled server-side by Google Ad Manager (formerly DFP), there is nothing to be installed on the website server by the publisher. That not only means less development for roll-out, but also no updates or maintenance.
No bid discrepancy
A significant frustration with Header Bidding is that the bid sent does not necessarily match the payment received for that bid. These discrepancies can be very significant and never seemingly favouring the publisher. Each shortfall represents lost revenue for the publisher. With Google handling billing within Exchange Bidding, the winning exchange is billed what they bid and the discrepancy issue goes away.
Exchange Bidding is a fairer auction
Rather surprisingly, Google’s solution actually offers Google less advantage in the auction. Most Header Bidding set-ups pass the winning bid to DFP, giving AdSense or AdX the opportunity to beat that bid by a penny and win the impression. Exchange Bidding gives up that advantage to Google, with AdX competing on a level footing with other competing exchanges.
Advantages of Header Bidding
Header Bidding uses JavaScript to obtain bids from competing partners in the header of each page as it loads. The winning bid is passed to DFP, where AdSense or AdX is usually allowed to compete against it. Publishers (or their monetization partners) need to have direct relationships with each bidder and handle reporting, reconciliation, billing and collection directly.
Ease of access
Where Exchange Bidding isn’t open to anyone, any publisher can download a copy of a Header Bidding wrapper, set it up on their server and start plugging in their demand partners. Prebid, the most popular wrapper is free, open-source code available to all, whereas Exchange Bidding is currently (at time of writing) restricted to those using DFP premium, those invited to the Small Business beta and those working with a partner such as OKO.
Works with more demand partners
Header Bidding solutions, such as Prebid have become quickly established and adopted by many demand sources. Exchange Bidding, by contrast, involves only demand from those demand partners who have entered into Google’s Exchange Bidding program. The number of partners available in Exchange Bidding is growing (10 at time of writing), but is unlikely to match the number involved in the Open Source Header Bidding programs.
More demand from the same partners
Demand sources that integrate with Header Bidding generally offer access to all of their demand. By contrast, some exchanges have geographic restrictions to their Exchange Bidding integrations. This would mean that an impression could receive a big through Header Bidding that it would not have received through Exchange Bidding.
Better cookie matching means higher bids
Buyers use Cookies to identify users based on past online behaviour and increase bids to target the most valuable ones. Client-side Header Bidding allows each bidder the chance to match cookies every time a request is made. Because Cookies can only be read by the domain that set them, Exchange Bidding can’t do this in the same way. Instead, Cookies have to be synchronised between the Exchange Server each participating exchange. That isn’t a perfect process and potential matches get lost, reducing the opportunities for stronger bids on valuable impressions.
Transparency
Publishers running Header Bidding are in control of the entire set-up and have full visibility on how the auction works. Exchange Bidding runs entirely within Google Ad Manager and is essentially a “black box” to publishers. Google decides the winner of the auction and the publishers doesn’t get to interrogate that process.
Header Bidding and Exchange Bidding – better together?
Where this article has mostly looked at the relative merits of each solution, there is a third option: OKO offer a solution to publishers that combines Header Bidding and Exchange Bidding in one simple set-up. Our Header Bidding solution runs both auctions to maximise the bids for each impression without compromising on performance. The result is higher bids without the performance cost of cramming more bidders into the header. Find out more about our Header Bidding solution here.
