In-app header bidding was originally used on websites, where advertisers would simultaneously bid for ad impressions every time a user loaded a site with an open ad slot. Many apps have adopted this bidding technique as well, as it provides more of a unified auction process and maximizes revenue for publishers. In-app header bidding operates through real-time bidding (RTB) where auctions are automated and bid results are determined within the milliseconds when a user loads an in-app page.
In-app header bidding is operated in real-time between multiple demand sources, where each participant gets an equal opportunity to place bids on ad impressions. This is very different from the waterfall technique, where an impression is handed over to an ad network one at a time in a certain order until an acceptable bid is offered. Any bids that were to be placed after, regardless of if the amount is higher or not, are automatically disregarded, and the respective ad creative is displayed. In-app header bidding, however, allows multiple supply-side platforms (SSPs) to get notified of a single ad impression, and these SSPs can signal multiple demand-side platforms (DSPs) and ad networks at the same time. The demand sources are not ranked in any specific order and are able to compete against each other in real time, with the highest bid winning the ad impression.
With in-app header bidding, publishers are technically allowed to offer their ad inventory to as many SSPs and demand sources as they want, instead of offering it to one demand source at a time. In turn, publishers will gain access to many more demands which heightens the competition. This will also drive up bid prices and help place more value in the ad inventory. The increased bid price can also contribute to maximizing revenue for publishers compared to the waterfall method where publishers set a predefined cap.
Since ad networks are no longer ranked and required to wait for their queue, they do not have to worry about being unable to access certain ad slots. Every advertiser and ad network is provided with the same opportunity to bid on ad inventories, including access to some premium ones. This is a major benefit for ad networks that were previously left with low-quality inventories and had limited access to profitable slots. The wider availability of slots also increases the chances of reaching the target demographic on a larger scale, with better traffic and engagement.
