Header bidding has become the norm for any publisher site with reasonable levels of traffic thanks to the revenue gains it brings. Despite quickly becoming the standard set-up, the principals of how header bidding works are often misunderstood. Our simple guide lays out what happens when you add header bidding to your auction.
1. Wrapper script runs
2. Bids requested
Header bidding can be configured to work with a number of demand partners (SSPs, networks and exchanges). Each of these gets to assess the ad request and decide weht
The wrapper allows each demand partner (or “bidder”) that has been set-up to get a look at the ad-request then waits for a response.
3. Bids returned
The wrapper will wait a predetermined time for all bidders to respond. Any that have not returned a bid during this time are excluded from the auction.
4. Header auction completed
Returned bids are adjusted, where needed, to account for issues such as discrepancies. The modified bids are then compared and the bid with the highest resulting CPM deemed to win the header auction. Being a first price auction, the winning bid is the value of the highest bid, rather than just 0.01 more than the second price. This winning bid is then passed to the ad server.
5. Header bidding line item selected
Within the ad server there will be a number of header bidding lines items set up. These are set to price priority to correspond with possible winning CPMs from the header auction. The line item corresponding to the price of the winning bid is selected and made eligible to compete in the ad-server auction:
Example: Line items may be created at $0.01 internals ranging from $0.01 to $15.00. If a bidder wins the header auction with a price of $5.35 then the line item priced at $5.35 is allowed to compete in the ad server auction. This is done by using key value pairs.
6. As server auction is run
The ad server auction is now run as usual, but with the selected price priority header bidding line item also competing to represent the winning bid. All eligible lines (from sponsorship down to house) compete as per usual. Header bidding doesn’t block you higher-priority (ie lower priority number) lines from showing.
7. Ad server auction completed
The ad server auction is then completed. Any eligible higher-priority line items or higher priced remnant line items would still prevent the winner header bidder from showing. Similarly, if dynamic allocation can outbid the winning header bidder then that will win the impression instead. With the auction completed the winning line item (either the header bidding line or another) is selected)
8. Ad impression served
The creative is called and the process ends.