Advertising technology is constantly changing, and it behooves both advertisers and publishers to keep up with the best practices.
One of these is header bidding, which is a key way to allow publishers to get the best deal, but which is behind in certain areas.
Understanding and properly using video header bidding can put you ahead of the competition.
What is Header Bidding?
Traditionally, publishers use the "waterfall sequence," where publishers seek the best price by requesting sequential bids at each platform. This is complex and does not scale well.
With header bidding, publishers seek ad bids from multiple demand partners at the same time, allowing them to quickly select the best bid. This encourages competition and tends to help keep prices down.
It requires a header bidding wrapper that runs on the website and can slightly increase latency, but it allows publishers to always get the highest bid for their inventory.
What Are the Advantages of Header Bidding?
The obvious advantage of header bidding is that it allows you to get the best deal. It helps both sides by speeding up the bidding process.
For publishers, header bidding increases CPMs and fill rates, reduces passbacks, and gives better data on the actual value of your inventory. It allows you to entertain bids from more advertisers, which increases the chance of finding ads that are well targeted to your audience (meaning you can charge more). It also ensures that high bids are received for every impression. All of this increases your overall ad revenue, often substantially.
For advertisers, it gives access to more of your inventory, including placements they might not have been able to access before. It particularly helps advertisers who choose not to go through the giant ad exchanges. It also gives them better data.
Header bidding thus helps everyone. It even helps consumers by improving ad targeting and reducing the annoyance of irrelevant ads. This improves the user experience and lowers bounce rates. It also reduces the chance of consumers becoming annoyed with a company because of poor ad placement, which can result in a negative hit to that company's overall reputation.
What Are the Disadvantages of Header Bidding?
The biggest disadvantage of header bidding is increased latency. The programmatic code that allows for bidding slows the load time on the page. Technological solutions are available to this, but they require a lot of development work. Some publishers may need to seek outside assistance to set up header bidding properly. This technical overhead can move into the future, with the header bidding wrapper not just being expensive to set up, but requiring some maintenance. It is handled through javascript, which can at times be slow to load. This can impact the user experience and can even increase bounce rates from your webpage due to slow loading, especially on mobile. This also incentivizes users to block your advertisements.
It also has to be closely managed, including chasing down discrepancies and bad creatives. Some header bidding systems are highly automated and this may make curation an issue. An ad that offers illegal services can get you into huge trouble, but more common is advertisements that simply do not match your values as a video advertising publisher. They may be irrelevant or even potentially offensive to your target audience.
How is Header Bidding Applied to Video Ads?
The short answer is: Badly.
While Google has offered easy ways to do header bidding, this is generally not applied to video advertising. Most ad networks do not offer header bidding as an option for video advertisers or for publishers.
When it comes to video, the very best video ad placement, that is instream pre-roll spots, is scarce and expensive. While YouTube may have a lot of videos, compared to the opportunities for placing, say, an image-based banner ad, there are still a lot fewer slots for this format, and equally few for the slightly less efficient mid-roll and post-roll ads. While a company can add mid-roll slots, too many of these cause customers to go elsewhere and can make them annoyed with the company placing the ads. Outstream units can absolutely help, allowing video content to proliferate. However, these ads are typically easy for consumers to block or ignore. On top of that, outstream units often result in slower load times. This can increase bounce rates, incentivize the use of adblockers, or cause the customer to scroll away before the ad has loaded.
Current header bidding technology only aggravates it, by imposing punitive time-out thresholds. Much video advertising takes place in private networks where publishers and advertisers cut overall deals. Opening up your video inventory to bidding, however, can significantly increase revenue. It can also increase the variety of ads, which means that consumers feel less bombarded. While a consumer needs to see an ad a few times before acting, saturation is a very real thing that can easily be reached with a limited number of advertisers, reducing their ROI.
What is the Solution for Video Header Bidding?
Despite header bidding's multiple advantages, video inventory is seldom included. This is in part due to technical issues, including significant latency. It is also in part due to the difficulty of including traditional pre-roll and post-roll spots, often the most valuable.
Thankfully, there are header bidding solutions coming out for video advertising. Both publishers and demand partners can thus benefit from the move towards header bidding.
JW Player offers one such solution. Header bidding is built directly into the player itself, reducing latency and meaning you don't have to write, or hire somebody to write, complicated javascript. In fact, when you use JW Player to manage your header bidding, there is no additional latency. This is powered by the popular open-source engine Prebid.js.
This helps maintain existing demand from integrated SSPs as well as expanding your demand sources.
JW Player is also a fast HTML5 video player, so using it reduces latency further by helping make sure video content and ads render on every screen, from desktop to mobile.