If you're familiar with the basics of header bidding, you'll know what a game changer it's been for advertising. (On the other hand, if you're wondering, "What is header bidding?", you might need a recap before you read on.)
Before header bidding, many publishers used the waterfall method of selling ad space, which involved offering their inventory to advertisers sequentially. Although it's still used to sell remnant ad inventory, as a way to sell prime ad inventory, the waterfall method just wasn't right.
Because advertisers weren't able to bid against one another in real time, publishers weren't able to select the highest bid, which meant it was impossible to maximize their ad revenue. Since header bidding came along, however, nothing's been the same.
Through online platforms known as ad exchanges, publishers can now sell their ad space to advertisers in real time, making it a level playing field for multiple demand partners. And this, in turn, ensures that the winning bid maximizes publishers' ad revenue.
So what's the story, then, with video header bidding? If the latest stats are anything to go by, the future of video ads is bright. In a survey from 2020, 74% of marketers said that video gave them a better return on investment (ROI) than static ads, while 94% of marketers who had used video ads intend to do so.
But how is video header bidding different from conventional header bidding? How does video header bidding work, and what are its advantages and disadvantages? And, more importantly, can video advertising help you improve your business's ad revenue?
Read on to find out how video header bidding just might be the next big thing you need.
Table of Contents:
What Is Video Header Bidding?
Video header bidding is the technique publishers use to sell video ad units to advertisers in real time.
In this sense, it's the same as conventional display header bidding, such as in-app header bidding, because it affords publishers more control over who they sell their inventory to. It also provides a level playing field for demand partners.
Recent reports project that demand for video header bidding is going to continue growing. In Canada, for instance, the ad spend for video ads has surpassed that spent on TV ads for the first time, and it's expected that by the end of 2024, video ads will make up 34% of digital advertising and about 20.2% of all advertising.
Why Is Video Header Bidding Important?
Video header bidding is just one of a number of header bidding solutions, but there are some qualities that make it the method of choice for many businesses.
We've mentioned how video header bidding—as with display header bidding in general—affords publishers more control over the inventory selling process. By controlling who can and can't make a bid request, publishers can prioritize certain advertisers, enabling publishers and marketers to form close relationships.
Here are some other reasons why video header bidding is so important.
- Business resilience and adaptability: By allowing a large pool of advertisers to bid for ad impressions, instead of a small one, publishers can diversify the range of advertisers who are interested in their site. By not putting all their eggs in one basket—static ads for example—video header bidding can build a publisher's resilience in what can often be a volatile market.
- Increased revenue: Diversifying one's pool of advertisers can also help increase a publisher's revenue, which can increase the appeal of their inventory.
- Greater ad quality: Advertisers who target consumers that prefer video ads will bid higher to show their ads to such an audience. Over time, this will lead to ads that are highly relevant to the audience.
- User experience: Video header bidding has simplified the process of selling and displaying ads, which has led to faster loading times and a better user experience for site visitors.
Given the increasing popularity of video ads—a 2022 Hubspot survey found that 86% of marketers felt that video ads had been effective for generating leads, up from 63% in 2017—it's clear that video header bidding will be increasingly relevant to the ad industry.
How Does Video Header Bidding Work?
When it comes to displaying a video ad, there are two types of header bidding: client-side video header bidding and server-side video header bidding.
Client-side video header bidding
The chosen bid is then sent to the publisher's ad server where it must compete with other demand sources, such as private marketplace (PMP) bids. The highest bid is then chosen, the publisher's video player loads the relevant ad and the user who triggered the process by loading the publisher's player sees the ad.
Server-side video header bidding
The process for server-side video header bidding is essentially the same. The only key difference is that the auction for video inventory is held on a dedicated ad server, not on the header bidding wrapper.
As is the case with client-side video header bidding, the publisher’s ad server evaluates the highest bid against other demand sources before a final selection is made. The user then sees the winning ad.
Let's say that John Rider, a keen motorcyclist, visits the site of a publisher specializing in motoring news and features. Clicking into a page about motorbikes, John’s browser begins loading the site’s various assets including a video ad unit.
This action causes the Java code on the publisher's site to send bid requests to various advertisers, through their respective platforms and ad exchanges. The header bidding partners then place their bids, which are then evaluated either on the header bidding wrapper or the relevant ad server, and, eventually, the highest bidding hubcap advertiser displays their ad to John as the publisher's video player loads.
It's worth remembering that, as is the case with the loading of static ads, this process occurs in milliseconds.
Such speed has made the server-side form of video header bidding especially popular among publishers, as running auctions on a dedicated ad server relieves the burden on their own site. Off-loading such a burden affords site visitors a faster page load time and that enhances their user experience.
What Is a Header Bidding Wrapper?
Wrappers define the rules that keep an auction running smoothly. These rules can specify the number of bidders and the start time of the auction, as well as when the auction will end, once the highest bid has been identified. Wrappers also make it easier for publishers to use analytics.
Another thing worth noting is the range of wrappers. Publishers can use open source wrappers, which are free and are the most popular type. Some of these wrappers allow publishers to set up their own auctions that can include more than 150 demand partners, although the technical aspects of this may be challenging for publishers with limited IT support.
The second type of wrappers are proprietary wrappers, which are usually provided by major ad exchanges. Although the in-built code in these wrappers can make the running of auctions much easier, some publishers prefer not to use them as they're less transparent than open source wrappers.
Finally, managed wrappers are ideal for those publishers who lack technical expertise but, at the same time, need transparency. The fact that the foundation for many managed wrappers is PreBid, a type of open source wrapper, makes them more transparent than their proprietary counterparts. And depending on the vendor providing them, they can also come with features such as a unified dashboard.
All three types of wrappers run auctions on both the client side and the server side of header bidding. But whatever their type, the importance of wrappers in the bidding process can be extremely useful. Here's why.
- Ad unit analytics: Wrappers have real-time reporting capabilities allowing demand side performance metrics to be measured. Moreover, the ad units’ financial performance—including ad revenue and CPM— can be tracked.
- Flexibility: Wrappers allow you to add or remove demand partners without changing the code of an individual demand partner
- Universal timeout: By setting a standard timeout for all demand partners in an auction, wrappers compel advertisers to give their bid response by a certain time, which leads to a better user experience for ad viewers.
How Do You Implement Video Header Bidding?
What differentiates video header bidding from conventional header bidding is its implementation process. Here's a snapshot of how to implement header bidding from the client side and the server side.
Client Side Video Header Bidding Implementation
- The video player on a publisher's site loads and the header bidding wrapper sends an ad request to supply-side platforms (SSPs) or ad exchanges.
- The SSPs or ad exchanges forward the ad request to advertisers through their demand-side platforms (DSPs) and ad networks. Each advertiser bids on the offered inventory.
- The bids are forwarded to the publisher's header bidding wrapper through their SSPs or ad exchanges. Provided that a bid response has been given within the time period set by the publisher, it will be evaluated.
- The header bidding wrapper then forwards the highest bid to the publisher's ad server.
- The ad server evaluates the bid against private marketplace deals and other sources. Once the highest bid has been selected, the relevant video ad is displayed.
Server Side Video Header Bidding Implementation
- A publisher's video player loads, which causes the header bidding wrapper to send an ad request to the server-side heading bidding vendor.
- The server-side heading bidding vendor forwards the ad request to SSPs and ad exchanges, from where it is sent to multiple demand partners such as DSPs and ad networks.
- The SSPs and ad exchanges return the highest bid, along with the ad markup, to the server-side header bidding vendor.
- The server-side header bidding vendor forwards the winning bid to the publisher's header bidding wrapper.
- The wrapper forwards the bid to the publisher's ad server.
- The publisher's ad server evaluates the bid against private marketplace deals and other sources. The highest bid is selected, then the corresponding video ad is loaded onto the video player.
Video Header Bidding Advantages
- Maximized revenue: Video header bidding increases ad revenue as, in most cases, a video ad tends to have a higher effective cost per mille (eCPM) and click-through rate (CTR) than a static ad.
- Increased ad fill rate: The more demand partners a publisher has, the higher their ad fill rate is likely to be. The fact that the demand for a video ad often outweighs the available inventory also ensures a sought-after ad fill rate.
- Transparency: By using header bidding analytics tools, publishers are able to monitor the performance of their advertisers.
- User experience: The fact that a header bidding wrapper runs an auction while a video player is being loaded ensures that there is no delay in displaying ads, improving the experience for the ad viewer.
Video Header Bidding Disadvantages
- Data security: It's possible that some advertisers won't make bids even though they receive a bid request and, therefore, also receive site visitors' cookie data.
- Transparency (server-side implementation): Advertisers can’t know whether publishers have a bias towards certain demand partners.
- User experience (client-side implementation): Use of a wrapper and video player can increase page load times and, therefore, affect user experience on the publisher's site.
Top 3 Video Header Bidding Tips for Publishers
- Don’t wait for users to hit the “Play” button: Sometimes there can be a delay between when your users click on a video and the moment it begins to play. To avoid this, start an auction as soon as a page loads, instead of waiting for users to click on the video player.
- Align ads with your playlist clips: If you've got a playlist, ensure that each clip has a relevant ad.
- Monitor your buyers: Are your buyers interested in different ads at different times of the year? Can you notice any trends? Keep a finger on their pulse and an ear to the ground to maximize your ad revenue.
In short, with the increasing popularity of video ads, it's worth incorporating video to your inventory. As we've seen, video header bidding is a win-win for both publishers and advertisers: the level playing field that simultaneous bidding affords advertisers maximizes, at the same time, the revenue that publishers can earn. And although it does have some disadvantages, on balance, video header bidding does provide businesses with a valuable and flexible source of income - a vital tool for any publisher or advertiser in today's ever changing digital landscape.
Publift helps digital publishers get the most out of the ads on their websites. Publift has helped its clients realize an average 55% uplift in ad revenue since 2015, through the use of cutting-edge programmatic advertising technology paired with impartial and ethical guidance.
Contact us today to learn more about how Publift can help boost your ad revenue and grow your business!