Prebid/Header Bidding from a user’s perspective

Imagine a world where the only e-commerce website is Amazon. If you can’t find the item you are looking for — tough. If you think the seller is pricing the item too high — tough. If the sellers are finding the Amazon commission too unfair — tough. That was the world of programmatic advertising before the introduction of prebid. Your main ad server, most likely DFP, is Amazon. A publisher can only choose from advertisers who advertises through your ad server’s chosen marketplace. In the case of DFP that is either Google Ad Exchange or Google Ad Networks.

With the introduction of Prebid, the ad server is removed from the monopoly position. It is like introducing CompareTheMarket (a price comparison site) in between what was traditionally the publisher’s website and their ad server. The result is that the publisher can choose from more markets (e.g. eBay and Gumtree) thus a larger choice of advertisers. The more the choices, the more the competition, and the higher price the publisher can sell their ad slots for.

How prebid works

With a non-prebid setup, ads render on the publisher’s website because at every page load there is a piece of client-side code (i.e. JavaScript) that calls the ad server in order to fetch creatives that would populate the ad slots.

With prebid, the client-side call needs to be modified so that before it calls the ad-server it calls multiple ad marketplaces (ad exchanges or SSPs) to get the price of the highest bid, only then the client-side code proceeds calling the ad server with the additional information about the highest bid. The ad server should have been configured (by the AdOps team) in such a way that if no higher bidder from the ad server’s ad exchange is found, then the highest bid from the third-party exchange will be used.

Using the analogy above of Amazon/eBay/Gumtree. Assuming Amazon is the ad server (e.g. DFP). The buyer looks up the price of a mug on CompareTheMarket which compares the best price only on the non-ad-server marketplaces, i.e eBay and Gumtree. Assuming a best price is found on Gumtree, details about that deal is then passed to Amazon which checks to see if there is a even better price on Amazon marketplace. If no better price is found then the deal from Gumtree will be honoured via Amazon.

Note that prebid isn’t a feature of DFP. DFP seems to integrate with prebid because the integration logic is setup by the publisher’s AdOps team. The setup is non-trivial. It involves creating a line-item for each pricing point (e.g. a line-item for $3.50 and another line-item for $3.60). Each line-item also points to a creative that is a piece of JavaScript code rather than a static multimedia asset.