• by Tobi Elkin , Staff Writer @tobielkin, March 25, 2016

More publishers are getting religion with respect to header bidding, which gives them the ability to allow exchange partners to see all of their available inventory and compete in real time for every single impression. Still, they need to know how to do this properly and avoid pitfalls.

In yesterday’s RTBlog, I pointed to sluggish page load times, time spent on the auction process and other potential challenges that may make some publishers reluctant to embrace header bidding full-on.

I checked in with Jason Fairchild, co-founder and chief revenue officer for OpenX, to hear his take on the header. Fairchild noted that latency (delay) is an issue when publishers use multiple header bidding tags on a page—this can overwhelm web browsers and result in slower page load times, which has a direct impact on the reader’s experience. He suggested that these problems can be avoided by working with a single header-bidding partner to place one tag on the page and run the auction through a server-based process.

“All the content and advertising that resides on publishers’ Web pages has to get to the browser through a limited number of pipes, 10 or 15 at most. If you have too many things competing for resources, you get a delay,” Fairchild explained. “The more stuff you put on a page, the more latency can occur.” Each header tag that’s added to a page creates more information flowing through a limited number of pipes.

The alternative to this is having just one call made from the browser to all the different servers. The call goes via fast, optimized connections that are not subject to latency or browser constraints. All the bids are sent back to the server the publisher is using, but the process is much faster using server-based infrastructure vs. the browser.

OpenX, which got into real-time auctions and header bidding in 2009, discovered early on that conducting auctions with lots of buyers within the browser isn’t ideal. “We’ve studied this for a while. We minimize what’s put on the browser to protect the user experience,” Fairchild said. “You can’t scale within a browser environment.” He projected that header bidding will eventually move to a server-side infrastructure in order to scale.

Core to its business, OpenX has seen client spending on header bidding grow more than 300% year-over-year as of Q4 2015. Fairchild said that OpenX header bidding clients, on average, see sustained increases in revenue ranging from 20% to more than 50%. “Header bidding works because it creates more price competition for each impression. Everyone [all demand partners] has to compete more and pay more. We’ve seen the benefits for those who turn it on,” Fairchild said.

Manage, a programmatic demand-side platform (DSP) and an RTB buyer on mobile exchanges, maintains that header bidding is gaining traction because it enables each impression to be sold for its actual, real-time value vs. the waterfall, which merely estimates and averages the value of the inventory over a specific period of time.

“Header bidding creates more equal opportunities for DSPs to bid on impressions, ones we might not otherwise see under the waterfall model. …We work under the belief that every impression has some value ascribed to it, and it's our job to help determine what that value is and make the appropriate bid on the advertiser's behalf,” Kai Sung, Manage’s chief technology officer, said via email.