Header Bidding vs Google AdSense

Frankvli

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Today I would like to discuss with you about a relatively new technology in the advertising industry: Header Bidding. Some of you may have heard about this technology, but I think the number of people who understand and optimize in this tech is very small.

I: What is Header Bidding?

Easy to understand, Header Bidding is an ad auction technology that enables publishers to sell their inventory for multiple SSPs, Ad Exchange... at the same time in a real-time auction.

II: Header Bidding creates a "fair" auction for all SSPs, Ad Exchange...


In fact, Header Bidding (Prebid) has appeared since May 2016. It is considered the technology is given to bring balance and "fair" competition to Google for established advertising companies. A number of major programmed advertising companies in the world can be mentioned as: Appnexus, OpenX, Rubicon Project, Pubmatic, AOL, Index Exchange....

You all know that Google has Double Click for Publishers or DFP now renamed Google Ad Manager. This is one of the largest Ad servers in the world today. Most publishers in the world use Google DFP as their ad server, the rate is lower because most publishers now only run Google AdSense.

Before the appearance of Header Bidding, Google always had a competitive advantage over other competitors because they were managing all Ad Server of Publishers. They see the entire inventory of publishers and they will prioritize their ads more in the waterfall auction model (waterfall).

However, When Header Bidding has appeared, It deleted the unique position of Google and replaced a fair auction for all advertisers. Therefore, the only one that does not take any advantages is Google.

III. How does Header Bidding create a fair auction?

When a user accesses the website and an ad call is made, Prebid will activate an auction sent to all buyers including SSPs, Ad Exchange / Adsense....

For example: If you are working with 5 people buying ads: Google Adsense, Appnexus, Rubicon, Pubmatic, OpenX

1 / Prebid will open an auction for 4 buyers: Appnexus, Rubicon, Pubmatic, OpenX

- Appnexus pays $ 1 ($ 1 CPM)
- Rubicon pays $ 2.5
- Pubmatic pays $ 1.5
- OpenX pays $ 0.98

2 / Prebid selects the winner is Rubicon at a price of $ 2.5 and sends this price to Ad Server as DFP.

3 / DFP will ask Google Adsense to see if they can buy this ad with a price higher than $ 2.5?

- If Google AdSense cannot buy for more than 2.5 $ => Rubicon is the winner with 2.5 $ CPM => DFP will display Rubicon ads for this impression.
- If Google AdSense is willing to pay more than 2.5 $ => Google AdSense is the winner => Google ads will be served

IV: What is the advantage of using Header Bidding compared to Google AdSense?

To think in simple way, if you only use Google Adsense ads => You only sell your inventory to Google including Google Adwords and some other Google Demands partners.

What will happen if you use Header Bidding?

1/ Revenue will be increased. Publishers are seeing an average increase in revenue of 30-50% when compared to using Google AdSense only.

2 / Publishers are able to sell your inventory to many other SSPs and Ad Exchange including Google AdSense / Google Ad Exchange.

3 / Google AdSense work on CPC model and Header Bidding is CPM. When you use Header Bidding, even Google AdSense will have to buy your impressions with CPM like other SSPs.

P/S: Taking up to 70% in 1000 largest websites in the world has used Header Bidding (According to Server Bid report in May/2018)

VI: Difficulties in Implementing Header Bidding

1 / Not having enough SSPs, big Ad Exchange to compete with each other

In my opinion, this is the biggest difficulty of most medium and small publishers. As everyone knows, it is not too difficult to work with Google AdSense. However, to work with other large SSPs, Ad Exchange as Appnexus, Rubicon, Pubmatic, AOL, Openx.... It's not that simple. They require very high volume and inventory quality.

In the list of SSPs, Ad Exchanges supports Prebid's header have more than 100 partners but if you only work with small SSPs then the competitiveness will not be high and Header Bidding performance is also not good.

2 / Setting up header bidding is quite complicated with publishers

Setting up header bidding is quite complicated if you do not understand deeply this technology and proficiently use Google DFP Ad Manager. Setting up reports, monitoring and optimizing settings in the header bidding also requires you to understand this technology profoundly.

If you have any questions you can post here. We will discuss together. Thanks
 
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