• Header Bidding

In-App Header Bidding or Multiple Mobile SDKs: What’s Best for App Monetization?

Konstantin Mirin
6 Apr 2020
19
In-App Header Bidding - image

Header bidding is one of the top tactics for publishers these days, as a programmatic approach to advertising continues to gain pace. While it’s already being used for desktop and mobile web monetization, apps are only beginning to adopt in-app header bidding. In fact, it’s not entirely correct to call it “in-app header bidding” since no header actually exists within the app. Instead, various terms like “unified bidding,” “parallel bidding” or “mobile bidding” are commonly used.

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Difficulties with app SDK integrations, as well as server-to-server setups, were keeping in-app header bidding from being broadly used. However, it seems app publishers are now discovering ways to deal with these issues since advertising and purchases are the most popular methods of app monetization. 

The most popular methods of app monetization - image

As for publishers, 58% of the top ten thousand US websites use header bidding for advertising, according to Adzerk. Both publishers and ad exchanges are seeing the benefits more clearly now, causing this new approach to be more widely adopted every day. So, what exactly is in-app header bidding and what’s driving its popularity? 

What is  in-app header bidding

To get a better understanding of  in-app header bidding, let’s start from the side of publishers and ad inventory. Mobile app publishers offer ad inventory, or a space for advertising, within their mobile app ecosystem. The ad inventory can then be divided and segmented according to the audience, purchase options, value and so on. 

Advertising space can be sold directly to advertisers, ad networks, or ad exchanges. Ad networks are aggregators that collect inventories from publishers and sell them to advertisers. Ad exchanges, on the other hand, are marketplaces where publishers and advertisers communicate directly to create deals on advertising. These marketplaces allow advertisers to bid on the inventory as soon as it is made available by an app developer or website owner. Real-time bidding is one of the core features of the programmatic advertising approach.  

Publishers usually offer ad inventory to several ad exchanges before making calls to their ad servers. In-app header bidding, or unified auction, allows app publishers to present it simultaneously to all interested parties, creating fair competition for every piece of free ad space within an app.  

Ad request - image

Advertisers are benefiting from parallel bidding while in-app mobile app monetization is becoming more efficient. How so?

Publishers previously used a so-called “waterfall order”, meaning ad impressions were first offered to the ad network that stated the highest price, before being pushed down and sold to less profitable channels. For clarity, let’s imagine the following waterfall order:

  • network A – $4 eCPM (effective cost per mille)
  • network B – $10 eCPM
  • network C – $7 eCPM
  • network D – $5 eCPM

Waterfall assumes that network A is the first call. If it agrees to buy an impression for $11, other networks won’t be called. However, let’s suppose network D is willing to pay $20 eCPM to launch a new campaign. In this scenario, despite the higher-paying campaign, network D won’t be offered the placement until network A, B & C pass up the offer.  

Waterfall Auction vs. Header Auction - image

In-app header bidding allows for  transparent auction dynamics, which is impossible with the waterfall approach for in-app and mobile web monetization. Unsold or undervalued impressions no longer exist – only dynamic auction and efficient ad inventory are being offered. To leverage this technique, publishers can integrate a primary ad server SDK and a Prebid SDK  for a fragmented, transparent and more efficient mobile app environment.

How header bidding in the app results in better monetization

Through mobile apps, publishers can connect with their loyal users, improve their experiences and create a high level of engagement. Long sessions within apps result in more ad views, a readiness for in-app purchases and increased in-app ads revenue. Therefore, adopting header bidding for advertising is a wise choice. But, what are its challenges? 

To work with the advertiser (or intermediary), the mobile app publisher must implement the advertiser’s SDK in the app. However, some mobile SDKs have drawbacks: additional downloading size, stability risks, and possible bugs that will affect the app’s UX. Even more, with specific SDKs, app publishers can cut themselves from new demand sources and increase development expenses. Luckily, in-app header bidding doesn’t play by these rules. 

There are two options for integrating header bidding into an SDK. First, ad exchanges can complement their ad SDKs with prebid technology, then offer them to publishers. Without this option, exchanges will be unable to compete in the market of fair auctions. 

Second, as for the publishers, it is not always an option to implement a prebid mobile SDK from a particular advertiser. Instead, app owners can consider developing their own ad SDK by the company that focuses on the prebid solutions. 

To keep from choosing between mobile app monetization and user experience, server-to-server is the only feasible way to implement in-app header bidding. S2S integration simplifies the management of demand sources without making any changes to the app. At the same time, it retains user experience at the highest level. In comparison to the full SDK, it only requires a piece of client-side code inside the app, keeping the latency intact. As a result, all server-side and client-side demand sources have similar conditions on the transparent auction, increasing in-app ad revenue for publishers. 

To Wrap It Up

If header bidding is so great, why don’t all app owners and ad providers opt for it? A few changes must be introduced to the app’s technologies and ad processes, requiring effort and an allotted budget. Still, the pros outweigh the cons as in-app header bidding is more efficient, technically sustainable, and requires fewer working hours. Publishers will no longer need to frequently reassign development resources to add a new SDK. In addition, ad exchanges and networks can now compete with fair and transparent conditions.

Postindustria is a trusted partner in developing monetization solutions for both publishers and ad exchanges. Whether you desire consultation on in-app header bidding, mobile SDK monetization or any other AdTech issue, do not hesitate to reach out. 

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