Header Bidding vs Waterfall- A Publisher Perspective

Has it not become a trend to explore, experiment, and break the conventions, to discover and invent? That has spread to all industries and sectors, and when the same fashion grew into the advertising sector, new platforms were created to ease the process. One such technological innovation is Header Bidding which eventually overcame the drawbacks of the Waterfall model. Waterfall, what you might know as the daisy chain or waterfall tags, is a process that a publisher makes use of to sell all remnant inventory. When a publisher has not been able to sell its premium ad slots that are usually reserved for direct ad sales between the publisher’s internal sales team and advertisers, Waterfall comes to their rescue. The process goes when demand sources are initiated one at a time, then one after another, and this recurring selling inventory is just why they are called Waterfall. Header Bidding is known to be a much cleaner and better tech integration between revenue partners, ad tech companies, and publishers relatively. One might also have heard of the same as advance bidding or pre-bidding, irrespective, it is an advanced programmatic technique, where publishers offer inventory to a number of ad exchanges simultaneously before making calls to their ad servers. The basic idea behind the same is that by letting a couple of demand sources bid at the same time, publishers may get an opportunity to increase their revenue. Here are we doing a comparative study between Header bidding vs waterfall from a publisher’s perspective. 

Header Bidding vs Waterfall: Benefits

Well, the ABCs of marketing dictates “Show me the money!” which is what the biggest benefit of header bidding is, that they have immense profits and merely adding a single header bid source can increase yield by 10 percent. Other than that, if a publisher combines their inventory with a single SSP, they could sell inventory on a per-impression basis, that would provide them with more transparency into the worth of per impressions. Well, the ABCs of marketing dictates “Show me the money!” which is what the biggest benefit of header bidding is, that they have immense profits and merely adding a single header bid source can increase yield by 10 percent. Other than that, if a publisher combines their inventory with a single SSP, they could sell inventory on a per-impression basis, that would provide them with more transparency into the worth of per impressions. However, in a traditional Waterfall model, the publisher has to set up the ad partners based on price priority levels and create passback tags so that if the demand from one partner is exhausted, it passes to the subsequent partners in the ad stack.  

Header Bidding vs Waterfall: Ad Network Partners List

Header Bidding has a good number of partners, that they collaborate with and the same includes, Criteo, Google(EBDA), Facebook, Amazon, AppNexus, Index Exchange, AOL Marketplace, Rubicon, OpenX and Centro. In a waterfall model, it is the publisher who is eligible to choose the list of partners based on the inventory type. Normally, at the top of the publisher ad stack are the direct advertisers and programmatic buyers which is followed by ad networks who have specific inventory requirements. At the end of the ad stack, the publisher monetizes the remnant inventory with Google Ad Exchange or similar partners which offers a global coverage. 



Header Bidding vs Waterfall: CPM Rates

There have been reports that suggest a 30%- 60% increase in revenue, prior to the use of header bidding. Though for that, one has to put in efforts, and work with the ideal number of header bidding partners, and track them to keep the good ones and drop the bad ones, and in the process not neglect site latency. Pubmatic has seen gains as high as 50% on their publisher’s sites, owing to the latter. With Waterfall, an increase in the revenue is assured and the same is tiered. Even though the highest tiers receive the maximum revenues, they have really low fill rates. Though as it goes down the fill rates go up and the CPM rates decrease. Additionally, the loss of inventory with every passback is higher in case of a Waterfall model when compared with Header bidding (due to latency). 

Header Bidding vs Waterfall: Working Process

Credits: Sovrn

Header Bidding might seem a complicated process, but to put it out there for you, it basically is a simpler way, through which the publishers conduct direct auctions so that the inefficiencies are neglected and the best prices are sought for the ad space inventory. The web publisher puts some tech in the website’s header, and on the loading of a page on the site, the code reaches out to the supported ad exchange or the SSPs for bids before their own ad server’s direct sales are called. The bidding takes place simultaneously, rather than sequential, and focuses on all available impressions and not just the ones that are available after direct sales. If the case is so, that a publisher was unable to sell its direct buys because those generally yield the highest CPMs, then Waterfall could be of help, if the publisher passes the impression down the waterfall to various ad networks until it is sold.  Their team would set up an ad network with a tracking tag that will execute if and when an impression is not filled, and the same is usually configured in platforms like Fallback Ads, Passbacks, Redirects, Default Ads, and the ones that are similar. Prior to that, the team would configure the premium ad network to pass back to the vertical ad network and so on.


Conclusion

While both of these are fairly good and offer a good set of advantages, but just like every coin, they too have two sides. Waterfall has its drawbacks like even though it forbids wastage of an inventory, it does not give much of a yield. Other than that, loading each tier takes time and when the same happens, and as more time passes, there is a high probability of the user not being able to see the ad. That been said, header bidding increases the workload for publishers and they have to put in more efforts, and other than that, it results in increased infrastructure costs.

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Works as an ad optimization specialist helping publishers increase their ad revenue in display, video, native, and high impact ad formats. You can contact him on skype (skype id: ronniedey) to increase your ad revenue immediately or hire him for a consultation. If you're an ad network owner, do get in touch for sponsored reviews.

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