Header Bidding, sometimes known as an ad server integration allows a demand partner to hold an auction outside of the publisher ad server and pass a CPM bid in real time by placing a code in the header of the website.
Header bidding allows an advertising partner with with this technology to pass CPM bid values to the ad server on every single impression, without the use of tags, instead of being placed in a line item at a static value in the ad stack.
The main benefit of header bidding for the advertiser is that in theory they have the opportunity to look at every single impression and assign a bid depending on how they value that impression instead of buying impressions in bulk that the publisher allocates to them. Overall it creates greater buying efficiency.
Header bidding eliminates the publisher waterfall by removing passback tags and the need to manually log into your ad network partners 3rd party reporting system to adjust the true CPM bid’s in your ad server. Now, an auction from multiple demand sources happens in real time and some providers even offer billing based off of publisher ad server numbers.
Having multiple header partners is a strategy that is becoming more mainstream among top publishers. Creating a true auction within your ad server creates upward pressure on all buyers to increase their bids if they want to win more inventory. Is the system perfect, nope but as more publishers adopt this practice.