What is in-app bidding?
In-app bidding refers to a method of programmatic ad sales for mobile publishers in which they sell their ad inventory in a real-time auction. It’s the mobile extension of browser-driven header bidding and is sometimes referred to as in-app header bidding.
Header bidding allows advertisers to bid against one another simultaneously rather than being placed in a “waterfall” hierarchy that pre-determines the priority of bids. By allowing advertisers to compete in real-time for impressions, publishers can guarantee they’ll receive the highest price (CPMs) for their inventory.
In header bidding, the header of a publisher’s web page includes a JavaScript tag known as a “wrapper.” This tag sends requests for bids out to demand partners, including advertisers and demand-side platforms (DSPs).
Multiple advertisers bid simultaneously in an auction for the available impression. The winning bid then connects the publisher’s and advertiser’s respective ad servers to display the ad creative in that slot to the end-user. All of this happens in real-time when a user clicks on a website or an app.
Header bidding vs. waterfall
Header bidding as a result of advertiser’s frustration with Google’s DoubleClick for Publisher’s (DFP) ad server prioritizing their own ad exchange (AdX) ahead of other demand partners.
The “waterfall” worked like this: Publishers set a floor price—the minimum acceptable rate for the inventory on offer. The top-ranked network attempted to broker a direct deal. If unable to do so, the opportunity was passed to the next in line of the ad network hierarchy. The deal closed whenever the floor price was met.
Header bidding created a fair, unbiased marketplace for advertisers to compete for the purchase of a publisher’s ad inventory.
By adding a piece of code to their website’s header or integration to their app, a publisher could send out a request to multiple demand sources, who would then be able to place simultaneous bids for the available inventory.
The waterfall method may not be entirely defunct, but the header and in-app bidding have by far eclipsed its predominance in digital ad sales.
Benefits of in-app bidding
- The main benefit of header or in-app bidding is that it gives publishers the chance to achieve a higher potential revenue from ad sales—not a difficult sales pitch to attract their attention.
- Publishers, too, are keen to provide a fairer marketplace for their inventory since more diverse competition among demand partners creates greater adaptability and stability on their platforms in the long run.
- A wider array of advertisers translates into a better user experience by presenting more relevant ads among their target audiences.
- Better targeting and attribution is a big win for advertisers, too. Higher-quality placements lead to higher conversions and engagement rates.
- Greater visibility into the auction process is a win-win for both publishers and advertisers.
Demand partners can adjust their bids on the fly to increase their chances of winning the impression, and publishers can prioritize networks on bid value in real-time, ensuring they can secure the best price for their inventory.
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