What Is Header-Bidding In CTV Advertising and Why Should You Care About It in 2022?

Programmatic advertising on CTV is not always straightforward to publishers when it’s happening through the waterfall. The auction should ensure that they get the highest bids for serving ads but in reality, CTV publishers often feel like they get paid way less than they should have.?

Why is this happening, and where is the solution? Header-bidding may be the one. It has redefined media buying on display and now it is reaching CTV advertising as well.?

Let’s take a closer look at this programmatic advertising method and see why CTV ad publishers tap into it asap.

What is header-bidding in CTV advertising?

Header-bidding (also known as advance bidding or pre-bidding) is an advanced programmatic advertising method where publishers offer their ad space to numerous ad platforms and exchanges simultaneously. As a result, they can choose the highest bid across platforms.?

In order to understand why it is considered advanced, you should try to understand the waterfall method that still defines the majority of second-price auctions in programmatic trading.?

In waterfall the ad space is offered to one platform and, if rejected, it goes to the other and the cycle continues until the impression is bought. Big ad platforms always were the first ones to see the ad space and bid on it but big does not always mean well-paying. In fact, they usually offered the lowest bids while taking advantage of being first in the line. As a result, high-priority advertisers who were offered a first look bought impressions at a low price. Those who could potentially offer more didn’t even get the chance to take part in the auction.

As a result, publishers didn’t get the true value for their inventory. When ad networks offer their bids simultaneously, the ad space is actually offered to the highest bidder.?

Why do CTV publishers choose header-bidding?

Header-bidding installation does require a bit of effort from the CTV publisher: normally, they have to work with JavaScript code for this method to work on display. There are client-side and server-side solutions for header-bidding auctions. Plus, there are lightweight header-bidding SDKs for mobile. All these solutions are very popular. Why? The answer hides in the numerous benefits that the media-trading method provides to the publishers:

#1 Increased revenue

The digital advertising landscape is still relatively new, compared to other forms of advertisement and, consequently, it constantly changes and improves to provide fair payment to publishers and fair conditions for advertisers. The waterfall system oftentimes put publishers at disadvantage by giving them lower bids. Header-bidding deals with this issue by gathering together all the bidders at once and defining the biggest bidder across platforms. It consistently increases the competition which is definitely an advantage for the publisher. As a result, CTV publishers can get more revenue. Considering that CTV offers space for high-quality creatives and usually shows the ad to more than one person (people stream video as a family or a couple), it is a fair trade.?

#2 Faster loading times

The higher the so-called waterfall is, the more time it takes till the impression is bought sometimes. In header-bidding, the ad is passed to one company - the one who pays the best - and serves the ad immediately. It is a significant benefit for the publisher.?

#3 Higher fill rates

While using the header-bidding approach, publishers offer their inventory to numerous advertisers simultaneously. Thus, publishers can ensure the highest possible fill rate so no ad inventory will be wasted or under-monetized.

#4 Better bidding transparency

With header-bidding, publishers can monitor the performance of their demand partners. Numerous header-bigging analytics tools allow publishers to track and evaluate the quality of their demand partners and estimate how much they are earning for the inventory provided

What is CTV header-bidding for advertisers?

Better chances to purchase decent ad placement

Header-bidding offers benefits for CTV advertisers as well. With this approach, the ad inventory is offered to all potential advertisers simultaneously. Thus, advertisers don’t need to wait their turn but can just offer their bid for the best offers. By offering a high bid advertisers can easily obtain the ad placement that they need.

Access to premium inventory

With header-bidding, publishers are more likely to offer their premium inventory on the open markets rather than private ones. Previously, advertisers were mostly bidding on the low-quality inventory that the publishers were not afraid to give for a lower price. Now they are sure that they will win the highest bid and are more open to the idea of selling premium space on the open markets.?

The waterfall method has also shown a preference for those who were bidding through Google Ads and it is obviously not the case for header-bidding. If you bid the highest or have ongoing cooperation with the publishers, you are the ones to be preferred no matter what.?

Is header-bidding in CTV advertising here to stay?

It definitely looks like the header-bidding in CTV is preferred by both advertisers and publishers, including established giants like Amazon and FreeWheel. This trend is actually just starting to take over the market and we are expecting to see it get even more traction this year. The waterfall method is becoming a legacy even in this form of digital advertisement.?

If you are looking for a high-quality CTV-focused ad exchange, consider registering on Integral Stream. The platform offers great benefits for both advertisers and publishers, so you’ll be able to fully leverage the power of the CTV advertising approach.