By Rajkumar Madhuram,VP of Engineering, San Jose, USA

Header bidding (also known as pre-bidding) is a term in the ad industry that is gaining a lot of momentum. In this note, I'll explain the mechanics behind header bidding, and how our company, C1X addresses some of the challenges involved.

When an impression is generated on a page, it is an inventory that has to be sold within the page load time, or it is lost forever. 

The Ad Server Waterfall

Publishers try to maximize their sell through and price, and typically set up what is commonly known as a waterfall or daisy chaining on their ad server (timings and prices in diagrams below are hypothetical).

It works like this - first priority is given to direct sold ads (highest CPM), in which case the ad server will serve the ad. The remaining (also known as remnant) inventory is given to the ad network which has historically yielded the best sell through and price. If the ad network cannot fill, it is given to a secondary network and so on. 

Header Bidding

In header bidding, most of the action happens on the browser side, where an auction is conducted among all the participating ad networks. This happens in parallel. Each network responds with a bid/no-bid, and a price if there is a bid. You can think of it as real time bidding (RTB) conducted from a browser.

The publisher's ad server still controls the ad tag, and serves the ad. However, the trick is to make the ad-server serve the ad that won the auction. This is made possible by using the custom targeting (a.k.a key-value targeting) feature on the ad server. The winning bid will still compete with any direct deals configured on the ad server based on the price. 

Advantages of Header Bidding

More revenue: In the waterfall model, the value of the impression reduces over time, and there is quite a bit of unrealized revenue potential. Header bidding ensures that the value of the impression is maximized. 

Less time: In the waterfall model, the overall time taken to render would be the sum of all the hops, which can run into many seconds. In header bidding, the auction is conducted in parallel with a cut-off time. This can considerably decrease the time to render the ad, and improve the user experience.

C1X and Header Bidding

One of the major hurdles for publishers to adopt header bidding is the complexity involved in the set up. Also, finding good demand sources to integrate will be a challenge. C1X addresses both of these.

At C1X, we have built sophisticated solutions that would enable publishers to try and adopt header bidding at ease. We work with many major publishers and make available a high quality (class 1) inventory. On the demand side, we have integrated with/and in the process of integrating with leading DSPs and agencies. 

If you are a publisher looking to adopt header bidding or an agency trying to get first look impressions from quality sites, please contact us and we would be glad to help! Please contact us Please contact us.