Exchange Bidding vs. Header Bidding

Exchange bidding (also known as Open Bidding) is Google's server-side response to header bidding, offering a simplified "plug-and-play" approach to programmatic advertising. Running on Google's managed servers, it provides easier implementation and reduced latency, though it comes with limitations in transparency and demand partner flexibility since Google controls the ecosystem.

Header bidding, on the other hand, is an advanced programmatic technique that enables simultaneous auction participation from multiple demand partners, replacing the traditional waterfall method where bid requests were processed sequentially. While it requires more technical implementation and can impact page load times when run client-side, header bidding provides publishers with greater transparency, better cookie matching capabilities, and the freedom to work with as many demand partners as desired – ultimately giving them more control over their ad revenue optimization strategy.

When it comes to sources of revenue, publishers want - and absolutely deserve - the best. Every revenue-generating platform claims to be the best choice for publishers, but a lot of those claims are nothing more than noise. At Playwire, we put publishers and their revenue first, so a big part of our mission is to help cut through that noise so you can earn as much as possible.

As you research ways to bring in more revenue, you have almost certainly come across the concept of header bidding. You're on the right track - header bidding auctions are one of the best ways for publishers to bring in revenue. But you might also have stumbled across something called Exchange Bidding.

Which option is best? In the Exchange Bidding vs header bidding showdown, who wins the night and brings in the most revenue for publishers? We have the answers. Read on to learn more.

Playwire's revenue amplification platform blends the best parts of all the most effective ad revenue generation methods. Want to learn more? Contact us.

-- Article Continues Below --

Header Bidding Pillar

Read Now: The complete guide to Header Bidding.

What is Header Bidding?

Header bidding is an evolution in programmatic advertising that allows all buyers to bid on a publisher's premium inventory simultaneously. Before header bidding technology, the automated process of programmatic advertising sent requests for bids to bidders one by one. Header bidding added a touch of democracy to that process.

In other words, header bidding made the programmatic ad buying and selling process more fair for advertisers and publishers, respectively. For advertisers, header bidding allows access to high-value inventory that might once have gone only to the bigger players who got bid requests first. For publishers, header bidding unlocks more revenue.

How Header Bidding Increases Publisher Revenue

How, exactly, does header bidding increase revenue for publishers? By making sure they get the highest bid for their inventory every single time. In the pre-header bidding days, the so-called "waterfall" method sent bid requests to bidders one by one and accepted the first bid request that exceeded the pre-set price floor. That meant that bidders further down the chain might have made higher bids, but they would never have the chance.

The Header Bidding Process

As a process, "header bidding" refers to the unified auction that takes place for every ad impression on a publisher's site. The process can be boiled down to a few simple steps:

  • A piece of Javascript on the publisher's site requests bids when a user loads the site.
  • The ad request reaches bidders, who then place their bids based on the publisher's site, information about the user and other factors.
  • The winning bid is selected, and that information is sent to an ad server.
  • In the ad server, the winning bid competes with direct demand and any other demand sources.
  • The creative for the highest bidder is served to the publisher's site, where the user who unknowingly initiated the process sees it.

The actual auction can take place directly on the publisher's site or on a dedicated server. If it happens on the site, it's called client-side header bidding. If it happens on a dedicated server, it's called server-side header bidding.

-- Article Continues Below --

Letterboxd Case Study

See how Letterboxd took advantage of header bidding for huge ROI.

What is Exchange Bidding?

Also called Open Bidding, Exchange Bidding is Google's version of header bidding. Google Open Bidding was developed in response to the advent of header bidding and some of the technical woes that may accompany the technology.

To that end, Google Open Bidding or Exchange Bidding, was designed to be simpler than pure header bidding. Exchange Bidding is done server-side, and Google ad manager manages the server. Think of Exchange Bidding as a plug-and-play version of the more complex process of pure header bidding.

Header Bidding vs Exchange Bidding: the Pros and Cons

When you consider Exchange Bidding vs header bidding for your site or app, it's important to remember that neither option is better or worse than the other on all fronts. Take a look at some of the advantages of each platform below.

Advantages of Header Bidding

Much like any other open-source ad tech, header bidding excels in transparency and available customizations.

Here are some of the benefits of header bidding over Exchange Bidding:

  • Transparency. Header bidding offers more transparency than Open Bidding. That's because the publisher builds and owns it instead of working through Google's established and proprietary system.
  • Better cookie matching. Better cookie matching can lead to higher bids. Client-side header bidding allows publishers to match cookies - information about a user's online behavior and preferences - for every auction. Exchange Bidding attempts to synchronize cookies between its ad server and the ad exchanges, but that process isn't as solid as the matching process in client-side header bidding.
  • Potential for more demand. Google's platform uses select exchanges, including its own, to generate demand for publishers' ad inventory. Publishers doing header bidding can add as many demand partners, supply-side platforms (SSPs) and exchanges as they like, which means more potential for demand.

Advantages of Exchange Bidding

While header bidding shines in transparency, cookie matching and potential for demand, Exchange Bidding stands out for ease of use and its ability to preserve site speed.

  • Easy to use. In Exchange Bidding, you add a few lines of code to your site and Google takes care of almost everything else. Google manages payments, the servers, the demand partners and more. Meanwhile, header bidding requires a lot more active participation from publishers to work well.
  • Less latency. Client-side header bidding is notorious for increasing page latency, which refers to slow movement of information across the ad network connections. Latency can lead to timeouts and worse site metrics that can impact everything from user experience (UX) to SEO. A server-side platform, Exchange Bidding speeds up the process of loading pages and serving ad content.

Exchange Bidding vs Header Bidding with Playwire

With Playwire, it isn't Exchange Bidding vs header bidding. It's Exchange Bidding and header bidding. If you choose one or the other, you are going to miss out on some of the benefits of the option that didn't make the cut. Why leave any potential ad revenue on the table when you don't have to?

Playwire combines the power of header bidding, Exchange Bidding and all the other major header bidding platforms to give publishers the edge they need to boost their revenue and thrive. That means you get the widest possible demand for your inventory.

You can get in on this, so what's stopping you? All you have to do is contact us online.

Apply Now