Making money is on everyone’s mind, right? Publishers are no exception, as they work hard and deserve to earn well. Thus, efficiently selling ad space has always been challenging in programmatic advertising. However, since the waterfall auction method served well in the early days and given the industry’s evolution, more profitable alternatives were needed. That’s where in-app header bidding came into play, revolutionizing ad sales on web pages.
Indeed, mobile apps required a different approach, a game-changing solution designed specifically for the mobile app environment. Today, we will discuss what it is and how to use it to your advantage through a real-time auction.
Table of contents
What is In-App Header Bidding?
In-app header bidding is a programmatic ad sales method for mobile publishers that began in mid-2015, where they sell their mobile ad inventory through a real-time auction. This technique extends the concept of browser-based header bidding to mobile apps, being built into an app’s software development toolkit (SDK).
Unlike the traditional waterfall auction model, where ads are ranked in a predetermined order, header bidding lets advertisers compete simultaneously. This real-time competition ensures publishers receive the highest possible price (CPM) for their ad impressions.
How Does It Work?
In header bidding, a publisher’s webpage header includes a JavaScript tag called a “wrapper.” This tag sends bid requests to various demand partners, including advertisers and demand-side platforms (DSPs).
Multiple advertisers then bid simultaneously in an auction for the available ad impression. The winning bid connects the publisher’s and advertiser’s ad servers, displaying the ad creative to the end user. This entire process occurs in real-time when a user visits a website.
However, in mobile apps, a browser-based wrapper isn’t available. In-app bidding uses an SDK (software development kit) integration. This SDK is a plugin written in the device’s native OS language (iOS or Android) that performs the same function of inviting advertisers to join the auction.
The process begins with the SDK creating ad requests for the app. These requests are sent to the cloud, where multiple advertisers bid in real-time through a server-side auction. The winning bid is sent back to the app’s SDK.
Depending on the app’s setup, the process can vary.
The Process for Apps With Dedicated Sales Teams
Apps with dedicated sales teams often use a primary ad server to handle direct deals with advertisers. These deals are organized into orders (campaign details) and line items (specific ad placements and pricing). The primary ad server prioritizes these line items based on price and importance.
The header bidding SDK competes with these direct deals by submitting bids from the server-side auction. If the primary ad server finds a higher bid than the one from header bidding, it will show that ad; otherwise, the ad from the header bidding auction is shown.
The Process for Apps Without Dedicated Sales Teams
Many app developers rely on multiple ad network SDKs without a dedicated sales team to sell their in-app inventory. Typically, these SDKs are arranged in a manual waterfall setup, where one ad network SDK is called upon to serve an ad. If that SDK doesn’t have an ad, the app moves to the next one in line.
To boost in-app ad revenue, developers often look to replace this inefficient method with a single SDK that connects to multiple cloud-side demand sources. Thus, header bidding solutions support this strategy by conducting much faster cloud-side auctions, eliminating the wait times associated with sequential SDK requests, and reducing client-side latency.
By integrating a header bidding solution without a primary ad server, publishers can access more cloud-side demand sources, reduce reliance on inefficient ad network SDKs, and maintain any SDKs while generating income. This approach streamlines the ad-serving process, maximizes revenue, and improves the overall efficiency of mobile ad monetization.
Waterfall Auction vs. Header Bidding vs. In-App Header Bidding vs. Unified Auction
| Basis for Comparison | Waterfall Auction | Header Bidding | In-App Header Bidding | Unified Auction |
|---|---|---|---|---|
| Auction Type | Sequential | Simultaneous (Client-Side) | Simultaneous (Client-Side) | Simultaneous (Server-Side) |
| Competition | Limited | Increased | Increased (Mobile Apps) | Increased |
| Latency | Lower | Potentially Higher | Potentially Higher (Mobile Apps) | Lower |
| Implementation Complexity | Lower | Higher | Higher (Mobile Apps) | Higher |
| Revenue Potential | Lower | Higher | Higher (Mobile Apps) | Higher |
| Process | Sends requests to SSPs one by one | Wrapper sends requests to multiple SSPs simultaneously | Functionally same as Header Bidding, optimized for mobile apps | SSP manages a single auction for all demand sources |
| Example | – | Prebid.js | Prebid Mobile | Google Open Bidding |
The Benefits of In-App Header Bidding for Publishers
1. Increased Revenue Based on Increased Demand
As a publisher, you stimulate competition for each ad impression by opening your ad inventory to more demand sources, such as programmatic advertising platforms. This increased competition drives up the price advertisers are willing to pay, resulting in higher CPMs and overall ad revenue. More bidders mean higher bids, directly translating to more publishers’ money.
2. More Transparency and Control
Header bidding provides a transparent and fair bidding environment. All bids are submitted simultaneously in a real-time auction, giving publishers a clear picture of their ad inventory’s worth. Publishers can set floors (minimum acceptable bids) to ensure they don’t accept low offers and treat all demand sources equally. This transparency allows for better decision-making and optimized revenue management.
3. Higher Fill Rates
With multiple demand partners participating in auctions, fill rates naturally increase. More advertisers competing for publishers’ ad space means fewer impressions go unfilled. This increases ad revenue and ensures that their inventory is utilized to its fullest potential, reducing waste and maximizing profits.
4. Improved User Experience
Increased competition among advertisers leads to more relevant ads being displayed. The app can improve when users see ads that are more aligned with their interests, engagement, and satisfaction. A better user experience often translates to higher retention rates and more time spent in the app, further enhancing app monetization opportunities.
5. Increased Inventory Value
Advertisers are willing to bid more for valuable placements through in-app header bidding, which increases the overall value of publishers’ inventory. Higher inventory prices mean higher profits for publishers, as the competitive bidding process drives up the perceived value of ad slots.
6. Reduced Manual Work
In-app header bidding automates the ad bidding process, eliminating the manual management required in traditional waterfall setups. This automation allows publishers to shift from historical pricing models to real-time pricing, ensuring they get the most revenue every time. By reducing the manual effort in managing ad placements, publishers can save time and resources, allowing them to focus on other essential aspects of their business.
The Benefits of In-App Header Bidding for Advertisers
1. Access to Premium Inventory
Generally, publishers might reserve premium ad space for direct deals, leaving less desirable inventory for open markets. However, in-app header bidding exposes all available inventory, allowing advertisers to bid on high-quality placements they might have missed. As a result, advertisers now have access to premium spots that were previously unavailable, enhancing their campaign reach and effectiveness.
2. Greater Transparency and Efficiency
Advertisers gain clear insights with all bids coinciding in a real-time auction. This transparency eliminates the inflated prices often associated with outdated waterfall setups and allows for more strategic bidding. Advertisers can see what they are up against and adjust their strategies based on real-time competition, leading to more efficient and cost-effective ad placements.
3. Improved Targeting
In-app header bidding often involves a broader range of ad exchanges, resulting in a larger pool of users for targeting. This expanded reach helps advertisers connect with their ideal audience more effectively. Detailed reports on site visitors’ demographics and impressions provide valuable data, enabling advertisers to distill their targeting strategies and reach their audiences at scale with greater precision.
4. Reduced Risk of Ad Fraud
Real-time auctions reduce the likelihood of fraudulent impressions, giving advertisers more confidence that their bids are going toward legitimate placements. The immediate and transparent nature of the bidding process minimizes the chances of ad fraud, ensuring that advertisers’ investments are protected and delivering genuine value.
5. Potential for Better ROI
In-app header bidding can significantly enhance advertisers’ return on investment (ROI) by reaching a more targeted audience and avoiding inflated costs. The ability to secure high-quality inventory at competitive prices and engage with users more effectively means that advertising campaigns are more likely to achieve their desired outcomes, maximizing ad spend efficiency and boosting overall campaign performance.
How to Set Up In-App Header Bidding
Before starting, ensure your mobile app works on Android and iOS and is available on the respective app stores. Here’s how to set up in-app header bidding for a mobile app:
- Choose a header bidding solution.
- Integrate the necessary SDKs, such as the Prebid SDK and Google IMA SDK.
- Set up the Prebid and primary ad servers to handle the bidding process.
- Establish a partnership with advertisers to create a competitive bidding environment.
- Set up your ad spaces within the app to manage and allocate them effectively.
- Conduct thorough testing and continuously optimize your setup to ensure it runs smoothly and generates maximum revenue.
Make sure you understand how these parts work together. If you need more experience in adtech or technical knowledge, it’s best to seek help rather than trying to set it up on your own.
Final Thoughts
Mobile ad spending is expected to rise as people spend more time on their mobile devices, an average of 6 hours and 40 minutes per day as of Q3 2023. With mobile ads becoming increasingly attractive to advertisers, setting up in-app header bidding is an excellent way for publishers to increase their earnings.
As mobile advertising grows, app publishers who want to succeed and grab a share of the increasing ad revenue will turn to programmatic selling, boosting earnings and creating a more competitive and efficient ad environment.
So, embracing it is a smart move and a critical step for staying ahead in the fast-paced world of mobile advertising.
Was this helpful?
