What is Video Header Bidding?

Video header bidding is a game-changer for publishers and advertisers. Unlike the archaic (and exhausted) waterfall method, modern-day header bidding is a win-win for everyone and leads to:

• Higher fill rates
• Increased bid rates
• Faster load times
• Improved viewer experiences
• Further reach for advertisers

Header bidding first emerged for display ads, and after its success in that medium, it spread to the video channel. With increasing video production and consumption, video header bidding helps publishers maximize their revenue while simultaneously improving the user experience.

Not sure what video header bidding is and how it works? You’ve come to the right place. Below, we’ll walk you through everything you need to know about video header bidding, including what it is, its pros and cons, how it works, best practices, and how to get started.

What is video header bidding (prebid)?

Video header bidding (sometimes referred to as prebid) empowers publishers to request ad bids from multiple demand partners (ad exchanges, demand-side platforms (DSPs), and supply-side platforms (SSPs)) synchronously. This real-time bidding (RTB) method encourages competition among advertisers and ensures the best bid wins, maximizing your revenue and satisfying advertising demand.

Sometimes, it’s easier to understand header bidding when comparing it to the older, more inefficient process: the waterfall method.

The traditional waterfall bidding method made bid calls to ad networks independently in sequential order. If the ad network’s bid fell below the price floor, the bidding process would move to the next bidder—if that price were above the price floor, it’d be accepted. However, it would be accepted even if it was lower than a higher bidder further down the bidding line.

This programmatic video bidding process caused multiple problems:

• Latency: Moving down the line between advertising networks often caused latency issues and slowed down the loading of the video.
• Revenue: Choosing any bid above the price floor (even if it wasn’t the highest) caused publishers to not realize maximized profits.
• Competition: Since advertisers just had to exceed the minimum price floor, there was no competition to compete or attempt to outbid the competition.

What Is the Header Bidding Wrapper?

The heading bidding wrapper is a JavaScript tag (within your website’s header) defining the rules to run the bidding process. Your header bidding partner usually provides this functionality, but the leading video platforms provide header bidding software built right into the players. For example, JW Player’s Player Bidding (powered by Prebid.js) is the first header bidding solution built directly into our HTML5 video player.

Well-made header bidding wrappers make it easy to edit your bidding rules. Here are a few of the properties you can change within your bidding wrapper:

• Demand partners: Include or exclude specific demand partners from an auction.
• Timeout period: Prioritize the user experience by defining the timeout period for each bidding partner.
• Number of bidders: Define how many bidders can participate in each bid.
• Price floor: Determine the price floor for each bid.

How Does Video Header Bidding Work?

Video header bidding works in two variations:

• Client-Side Video Header Bidding
• Server-Side Video Header Bidding

Client-Side Video Header bidding

Here’s a brief overview of how client-side video header bidding works:

1. Video player loads and your header bidding wrapper calls the bidding networks to receive their bids.
2. SSPs send a request to DSPs and ad networks to place their bids on the video inventory.
3. SSPs collect bids and send them to the header bidding wrapper.
4. Header bidding wrapper evaluates the bids within the timeout period to determine the highest bid.
5. Header bidding wrapper sends the winning bid to the publisher’s ad server.
6. The ad server compares the highest bid with private deals and other sources to determine the all-time highest bidder.
7. The publishing ad server serves the winning bid advertisement to the video player for the user to consume.

Server-Side Video Header Bidding

Here’s a brief overview of how server-side video header bidding works:

1. Video player loads.
2. Header bidding wrapper initiates an ad request to the heading bidding platform.
3. The server-side vendor sends the ad request to multiple SSPs simultaneously (and the SSPs send the ad request to multiple DSPs).
4. SSPs send the highest bid to the server-side header bidding platform.
5. The header bidding platform sends the winning bid to the header bidding wrapper.
6. The header bidding wrapper sends the bid request to the ad server.
7. Ad server compares the highest bid with other private marketplaces, and the winning bid is chosen.
8. Ad server sends the video ad file to the video player for the user to consume.

Pros and cons of video header bidding

Video header bidding is a revolutionary solution for publishers and advertisers, but it’s not perfect yet. Below, we’ll explore the advantages and disadvantages of video header bidding for video advertising.

Benefits of Video Header Bidding

• Maximum Revenue: Choosing the highest bidder every time ensures you maximize revenue and incentivizes advertisers to be more competitive.
• Higher Ad Fill Rates: Partnering with more demand sources ensures demand exceeds supply, increasing your fill rates.
• Improved Ad Quality: Advertisers will pay more when they see a return on investment (ROI), which guarantees quality for the ads and your users.
• Better User Experiences: Users get to see more competitive ads from various sources, helping them see what they want and not just the defaulting bid.
• Flexibility: Video header bidding helps prevent putting all your eggs in one basket—when one demand source falls through, you’ll already have plenty of other interested parties.
• Scalability: As you grow and expand your partnerships, it becomes increasingly difficult to manage your advertising programs—header bidding wrappers simplify and streamline this process.

Downsides of Video Header Bidding

• Complexities: You’ll need a bit of developer resources and technical know-how to implement video header bidding. Fortunately, many providers dedicate a team to help you set up and launch with ease.
• Decreased Demand Sources: Not every demand source has progressed to video header bidding (yet), so you might lose less technically-savvy sources.
• Data Security: Advertisers can take advantage of visitors’ cookie data to gain insights and even find lower-costing alternatives—all without placing a bid.

Best practices for video header bidding

Using a complete video platform will help simplify video header bidding, but it’s not a set-it-and-forget-it solution. You’ll need to follow and maintain a few best practices to ensure an optimal experience for advertisers, users, and your bottom line.

Here are a few essential best practices for video header bidding:

1. Use a Reputable Platform

Not all video platforms are created equally. The wrong header bidding solution will complicate the process and make optimizing difficult.

Look for a solution that will simplify the process for you and your advertisers. Investing in the right ad tech from the get-go will set you up for long-term success—and it also protects your reputation with demand partners and your audience.

Don’t settle for less. Choose a platform you know you can trust. It should provide the built-in technology you need for header bidding, and it should have integrations with popular demand partners.

2. Choose the Right Demand Partners

Research and choose demand partners you can trust. There are a handful of things you’ll want to keep in mind:

• Reputation: Choose a demand partner with a positive, long-lasting reputation. They should be well-known for delivering quality and having top-notch support teams.
• Ad Quality: Work with demand partners who show quality advertisements. These will have more success with your audience, and they’ll also improve the user experience.
• Fill Rate: Find a demand partner with consistent fill rates. You don’t want to miss out on revenue because multiple partners let you down at the same time.
• Relevancy: Choose demand partners with relevant brands and advertisements for your target audience. The best quality and fill rates in the world won’t matter much if your audience doesn’t connect with the ads.
• Integrations: While you can always build workarounds to work with a demand partner, technological complications can be a major deterrent. Find out if your header bidding solution provides integrations for the potential demand partner.

3. Prioritize the User Experience

Remember, it’s all about your users. Your ad revenue won’t last long if you put off your audience and they stop engaging with your content. Always put your users first.

What does that mean in practice? Sometimes, it means going for the lower-paying demand partners because they promise better quality and relevancy for your audience. Other times, it means decreasing the timeout period and losing out on revenue to preserve the user experience.

Regularly talk to your customers and figure out their wants and needs. Do they like the advertisements across your content? Does anything put them off? What could you do to improve their experiences?

4. Test Your Header Bidding Wrapper Settings

Test your settings to determine what works best for your advertisers and users. You might experiment with different demand partners, timeout periods, price floors, or the maximum allowed number of bidders.

User preferences and trends change. What works best today might not work best tomorrow. Regularly run experiments and A/B tests to optimize your program. Even minor improvements in your bid rates and fill rates can have an exceptional impact on your bottom line.

5. Optimize Your Floor Price

Floor prices shouldn’t be set in stone. They should be fluid depending on the video content and engagement. Here are a few formats of price floors to consider:

• Hard Price Floor: The highest bid must exceed the price floor to win. No advertisement will be shown if no bid meets or exceeds the price floor. This ensures quality advertisements and higher RPM (revenue per thousand ad impressions).
• Soft Price Floor: The highest bid can still win and be placed even if it’s slightly lower than the established floor price. While you won’t maximize your RPM, you’ll ensure a higher fill rate (which could be better for your bottom line).
• Dynamic Price Floor: The price floor value automatically adjusts based on the historical performance of demand partners. It might not always be the best you can do, but it does take a bit of the manual adjustments out of your hands.

6. Monitor Your Metrics

Keep an eye on your advertising metrics to gauge the value and performance of your program. Whenever you notice something off, dig into the problem and learn more—it might be a bigger issue or a larger opportunity.

Here are a few of the metrics you’ll want to review regularly:

• Traffic
• Bounce rate
• Total impressions
• Cost per click (CPC)
• Cost per thousand (CPM)
• Cost per acquisition (CPA)
• Click-through rate (CTR)
• Conversion rate

7. Implement Frequency Capping

Seeing the same ad over and over can irritate users and deter them from consuming your content. The advertising experience is part of consuming your content—if it’s dry, repetitive, and dull, it will negatively impact your audience.

Frequency capping restricts advertising campaigns (or specific advertisements) from appearing on your users’ screens too often. Publishers benefit from frequency capping because it optimizes the user experience—and advertisers benefit by avoiding spending excess money on users that aren’t converting.

You might limit the number of impressions per day or week (depending on the type of content you serve). Monitor bounce rates and conversion rates to determine the ideal frequency for capping.

Get Started With a Built-in Header Bidding Solution

Ready to maximize your revenue and simplify the advertising process? Get started with JW Player’s Player Bidding. Our header-bidding solution is built directly into our player, streamlining implementation and setup. We provide a turnkey solution that can help you launch in just 3 clicks.

Ad scripts, parameter passback, bid response storage—it’s all built straight into our platform. And we provide plenty of integrations for demand partners, including EMX, PubMatic, SpotX, and Telaria.

Plus, our built-in solution reduces the latency and lag other video header bidding solutions introduce. Our solution (in combination with our lightning-fast HTML5 player) has no added latency and up to a 60% increase in ad yield—that means fewer bounces and faster page load times.

Want to try it for yourself? Talk to our JWP video experts to get started.