What is Server-Side Header Bidding? Pros and Cons

Digital publishers are continuously focusing their efforts on actively optimizing their monetization strategy to get the best rates for their premium ad inventory and maximize their revenue. 

But the landscape of digital advertising comes with an overabundance of advertisers, networks, SSPs, and exchanges that greatly vary in quality and the amount they are willing to pay for ad space.

To achieve the dream of flowing revenues with premium advertisers, publishers have moved to header bidding. 

Through header bidding, publishers can sell their ad spaces on different ad exchanges and networks at the same time, thereby increasing the inventory value through programmatic advertising.

In a short time, header bidding has emerged as the preferred mode of inventory selling for publishers. 

There are two types of header bidding; server-side and client-side. Even though many publishers initially sought client-side header bidding, server-side header bidding has gradually made its mark on the Ad Tech industry.

In this article, we will talk about server-side header bidding, its key features, the difference between server-side header bidding and client-side header bidding, and how it might be the future of monetization for publishers worldwide.

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What is Server-Side Header Bidding?

Server-side header bidding, also known as server-to-server header bidding, or S2S is a header bidding process where the ad space auction will take place on an external ad server. 

As the auction is moved to an external server and not the user’s browser, it positively impacts page speed, and publishers can connect with multiple ad exchanges, ad networks, and SSPs without worrying about hampering the user experience.

In client-side header bidding, as ad networks, SSPs, and ad exchanges use the user’s browser to run simultaneous auctions, the browser requires significant processing power, which can reduce page speed. 

This became a huge issue, especially with publishers that had a large number of ad spaces. Server-side header bidding was conceptualized to tackle the speed issues that client-side header bidding posed.

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Server-Side Header Bidding vs. Client-Side Header Bidding

In contrast to server-side header bidding, which takes place on an external server, client-side header bidding, or browser-side header bidding, the auctions run in the user’s browser. 

In both bidding solutions, publishers have to auction off their inventory to multiple demand partners, which then place bids. The highest bid is selected as the winner, and the ad associated with the bid is displayed.

S2S header bidding brings multiple advantages over client-side header bidding for publishers. Here are some of the key differences between server-side header bidding and client-side header bidding.

1. Page Speed: Since client-side bidding leverages the user’s browser, it can slow down the page speed due to increased latency. Multiple bids and ad spots can increase your page loading time, thus affecting the user experience and increasing bounce rate. In S2S header bidding, however, the browser sends a single request to the ad server, which then processes the auction and sends the ad of the winning bid, reducing the browser’s dependency.
2. Video Content: Video content has seen exponential growth, and it is apparent that publishers and advertisers are cashing in on the trend by showing video ads. However, video content, and other visually-rich media, require substantial processing power, which can be detrimental to page speed. Therefore, publishers are moving to S2S bidding over client-side bidding for video content.
3. Compatibility: To ensure that everything works perfectly, all elements of the process need to be compatible with each other. In client-side bidding, the process relies on the user’s browser, be it the audience, the publisher, and the auction process. The process can be jeopardized if the browser is not up to date, which can limit the publisher’s revenue. In S2S bidding, the browser is only used to send a request to an external server, which reduces the reliance on the browser.
4. Number Of Advertising Partners: Browsers have a limited number of network connections that they can make simultaneously, which limits the number of advertising partners you can get. In server-side bidding, the server can send as many bid requests as possible without any restrictions. This ensures the best bids reach the publishers, maximizing their revenue

However, there are certain aspects where client-side header bidding performs better than server-side header bidding

1. Cookie Matching: Since the user’s browser is utilized in client-side bidding, it can identify users through cookies, enabling advertisers to run targeted ads, which can result in higher revenue for publishers. Since S2S bidding lacks cookie matching due to auctions being run on external servers, the data is filtered and makes user targeting harder. However, third-party cookies will soon become obsolete, as Google has announced that it will start phasing them out. Therefore, transitioning to S2S header bidding before the phasing process is executed will be a smart move for publishers.
2. Transparency and Control: In server-side bidding, publishers set the floor price for the auction. However, they have no control over who the buyer can and cannot be, as the auction process is not transparent. However, with client-side bidding, publishers can choose the buyers by using wrappers. This enables them to see which buyers are bidding on the ad space. Publishers can also add and remove demand sources in client-side bidding to exclude or include some advertisers as they wish.

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Benefits of Server-Side Header Bidding

Server-side header bidding, a modern approach in digital advertising, brings several benefits that are transforming the industry. This method shifts the bidding process from the client's browser to a server, enhancing ad operations in various ways.

Efficiency in Ad Decision-Making and Load Speed: Server-side header bidding speeds up decision-making and page loading. With processing done on the server, browsers face less strain, leading to quicker page loads. This not only improves the user experience but may also increase ad revenue for publishers and the success rate of ad campaigns for advertisers.

Enhanced Transparency in the Ad Ecosystem: This technique offers a clearer understanding of the bidding process. With all demand sources bidding simultaneously, it ensures a fair selection of winning bids, giving every participant an equal opportunity to compete for ad impressions.

Empowered Control Over Ad Inventory: Publishers gain more control with server-side header bidding. They can set specific rules for selling ad impressions, allowing for better management of pricing and placement and optimizing the value of their inventory.

Optimized Ad Fill Rates: By enabling multiple demand sources to bid on ad impressions concurrently, server-side header bidding can significantly improve ad fill rates. This increases the likelihood of finding suitable bids for each impression, reducing unsold ad spaces.

Scalability to Meet Growing Demands: Server-side header bidding, unhampered by browser limitations, allows connections with numerous ad demand partners. This scalability is essential for managing expanding ad operations, especially for high-traffic publishers or those with a diverse, international audience.

Improved User Experience in Native Video Advertising: Video ads can slow down websites due to their high processing needs. Server-side header bidding mitigates this by reducing external server calls, thus enhancing page loading times. This is especially beneficial for publishers with substantial video ad content, ensuring a smoother user experience.

How Server-Side Header Bidding Works

Both server-side and client-side header bidding function similarly, allowing publishers to auction their ad inventories to ad exchanges, networks, SSPs, and other demand partners. The critical difference is that in server-side header bidding (S2S), the bidding occurs on an external ad server, while client-side header bidding uses the user’s browser to run auctions.

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Here’s what the S2S header bidding process looks like:

1. The user enters a URL to visit the website
2. The browser initiates the page-loading process
3. The header bidding tag added to the page’s code sends a request to the ad server hosted by the bidding company
4. The server sends bid requests to advertisers, exchanges, and SSPs
5. These bidders send out their bids, and the one with the highest bid wins
6. The winning ad is run on the page as it loads for the user

How to Choose the Right Server-To-Server Header Bidding Provider?

While server-side header bidding comes with a pool of features, it is critical to choose the right partner that not only maximizes your revenue but also enables a transparent and rewarding process. Below are some parameters you should look at while selecting a server-side bidding partner.

• Revenue: As the primary factor for a majority of publishers, revenue should be the key parameter publishers should look into while choosing an S2S bidding partner. The right partner should have premium advertisers that are offering increased rates for inventory, and the ability to match users to the right advertisements to maximize the revenue without affecting the user experience. Many S2S providers have premium advertisers but fail to match audiences to the right ad, thereby creating a negative experience that may even result in increased drop rates.
• Transparency: Having a transparent and fair auction is essential to maximize your revenue while selling your ad inventory. As you choose a bidding solution, make sure the auctions are fair, transparent, and don’t come with unnecessary charges (including high middlemen fees) that reduce your revenue.
• Enhanced User Experience: When you choose a bidding solution, the ad they provide will be viewed by your users. Therefore it is vital to know if your new partner’s solution will affect your user experience or not. While the server-side process removes the dependency on the browser, the process should be fast enough to ensure users don't feel latency in ad retrieval. Prolonged delays and added latency can disturb the viewer’s user experience, impacting your metrics negatively.

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Is Open Bidding a Server-side Header Bidding Solution?

Yes! Google Open Bidding, formerly known as Exchange Bidding Dynamic Allocation (EBDA) is a server-side header bidding solution. 

The Google OB is a server-side unified auction allowing supply-side platforms, ad networks, and ad exchanges to sell ad impressions available simultaneously with Google AdX. Open Bidding allows publishers to invite third-party demand partners to compete for your inventory in a single auction with real-time, server-to-server bidding. If you want to know more in detail, here’s our in-depth article on Google Open Bidding.

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Future of Server-Side Header Bidding

While the debate for client-side vs server-side header bidding has continued among the publisher circles for a long time, many Ad Tech experts believe S2S bidding will reign supreme. 

This can be attributed to the fact that third-party cookies will become obsolete in the future, with Google phasing out cookie support from Google Chrome

While this change is bound to affect all publishers on client-side bidding, publishers leveraging server-side bidding shall not worry. 

The discontinuation of cookies can mark a huge shift for publishers from client-side bidding to server-side bidding, making it the advertising standard for all publishers.

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Final Thoughts

While client-side header bidding offers a higher revenue to publishers due to cookies, server-side header bidding provides multiple other features that will benefit publishers in the long term. 

S2S bidding enables publishers to ditch browser dependency, slow page speed, and limit ad partners to take control over their revenue. The added benefit of a better user experience makes it a far better proposition than client-side bidding.

iion offers next-generation monetization solutions for publishers looking to catalyze their earnings through header bidding. With a unified platform, we enable premium advertisers to bid simultaneously for your ad inventory so you can get the best rates for your inventory. Coupling that with easy deployment, you can get started with iion in no time!

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