Header Bidding vs Real-Time Bidding (RTB): What’s the Difference?

by The MNTN Team

Min Read

Modern advertising platforms rely on programmatic bidding systems to assign ad slots and allow marketers to fight for the right to display their content. Understanding the difference between various bidding strategies will help you maximize your return on investment (ROI) while also getting your content in front of the ideal audience.

Two of the most popular frameworks you’ll encounter are header bidding and real-time bidding (RTB). Here’s everything you need to know about header bidding vs. RTB.

What Is Real-Time Bidding?

Real-time bidding (RTB) allows website owners to sell ad slots in real-time auctions. The process takes place within milliseconds as a user loads a web page, allowing advertisers to bid on individual impressions based on their targeting criteria.

How Does RTB Work?

Every time a user visits a website, the following steps occur in the RTB process:

The publisher’s ad server sends a request to an ad exchange.
The exchange will send a bid request to the demand-side platform (DSP), including information about the user and details about the impression.
If the opportunity matches your criteria, the DSP will submit a bid on your behalf.
The ad exchange will hold an auction, and the highest bid wins.
If your bid wins, your ad will be delivered to the user’s browser.

This process occurs in milliseconds, and the user barely even knows it’s happening.

Advantages of RTB

Real-time bidding offers several advantages over other bidding processes, including the header method. RTB automates the buying process, which saves you a tremendous amount of time and effort when purchasing ad space. You can set up your campaigns, define bid criteria, and let the programmatic advertising algorithm do the rest.

Real-time bidding also promotes precision targeting. You can define your audience based on demographics, interests, and browsing behaviors. Doing so helps increase the relevance of ads and avoid waste.

Thanks to the control RTB provides, you can also make your campaigns more cost-effective. If an impression opportunity doesn’t meet your targeting criteria, the algorithm won’t enter a bid.

Disadvantages of RTB

One of the main drawbacks of the real-time bidding process is its lack of transparency. You might not always know where your content appears, and this could mean your content shows up alongside brands that don’t align with your values.

Ad fraud is another concern when using RTB systems (and any digital system for that matter). Less reputable real-time bidding platforms might be susceptible to acts of fraud, like fake clicks and impressions.

Depending on how many ad exchanges and DSPs are involved, the real-time bidding process might cause latency. Slowing down the loading times of web pages can negatively impact the user experience and diminish the efficacy of your ads.

What Is Header Bidding?

Header bidding allows publishers to offer ad slots to multiple demand sources at the same time. Also known as “pre-bidding,” the bid process increases competition among advertisers and can increase the seller’s revenue.

Header bidding occurs before a publisher’s site makes a call to ad servers, meaning the ad slots are purchased in advance.

How Does Header Bidding Work?

Like RTB, header bidding begins when a consumer visits a publisher’s website. Here’s what happens next:

The header bidding code is triggered.
The code sends a bid request to multiple demand partners.
These partners submit their bids for the available ad impressions.
The bids are reviewed, and the winner’s content is displayed.

At first glance, the process may seem quite similar to real-time bidding. However, there are some key differences.

The most notable discrepancy is how many demand partners receive the bid request. Under the RTB model, only one ad exchange will receive the request. With header bidding, multiple exchanges and supply-side platforms (SSPs) receive bid requests.

Advantages of Header Bidding

Header bidding can be advantageous to publishers, as they can auction their ad slots to more marketers. Extra competition can drive up bids and net the publisher a lot more money for available ad slots.

The header bidding process also gives publishers greater transparency in the auction process. They can get a sense of how much each demand source will pay for their inventory. Advertisers, on the other hand, enjoy less transparency and might have a harder time winning impressions without upping their budget.

Lastly, header bidding opens up access to premium demand sources. Publishers may not be able to access the same sources through a traditional exchange. Increased competition can lead to higher engagement and better ads, both of which are great for the publisher’s long-term site traffic.

Disadvantages of Header Bidding

Header bidding can be complex. You must carefully set up your campaign and keep a close eye on it to ensure it meets your expectations. Managing a header-based auction framework can also be a lot of work for publishers.

There’s a risk of receiving duplicate bids from the same demand source during a header auction. This can complicate the bidding process and affect auction efficiency.

Like RTB, header bidding can be susceptible to ad fraud. Publishers and advertisers must carefully monitor and verify bids — a task that can be challenging and resource-intensive.

Summary of Key Differences

The RTB vs. header bidding debate can be boiled down to a handful of key differences, including the following:

Bidding Process

Real-time bidding involves a single auction within one ad exchange. The highest bidder wins and pays for the impression they won. This simple, efficient auction helps minimize the risk of latency while making RTB-based programmatic advertising simple and accessible.

Header bidding allows multiple ad exchanges to bid simultaneously. This approach increases competition and, consequently, drives up the value of ad slots. It also increases the risk of latency.

Latency and Speed

Real-time bidding can introduce latency due to the nature of the bidding process. The entire auction must occur in the few milliseconds that pass after a user clicks on a search result but before the page loads.

Header bidding has an even greater risk of latency. You can mitigate these risks by using server-side bidding, which means that the auction takes place on the server. The alternative approach is user-side bidding, which auctions the ad slot directly within the user’s browser.

Revenue Potential

Real-time bidding offers cost-effective auctions with precision targeting. It tends to be more appealing to advertisers, as they enjoy lower rates and less competition.

Publishers may favor header bidding because it can result in higher revenue and increased competition. Header solutions also give publishers access to top-demand sources, making it easier to offload inventory.

Programmatic Advertising With CTV

While both header bidding and real-time bidding offer value to your marketing strategy, RTB will typically provide more bang for your buck, especially when you are advertising on Connected TV platforms. MNTN makes CTV advertising more accessible than ever by combining a streamlined RTB ad-buying process with direct deals with top streaming networks.

As a MNTN Performance TV client, you’ll get the best price on ad slots at the time of purchase while also enjoying transparency and access to premium streaming advertising inventory. Our exclusive pricing can help you maximize your return on investment while getting your content in front of the ideal audience.

Learn more about how MNTN gives you a competitive edge. Book your demo today.

Header Bidding vs. RTB: Final Thoughts

Header bidding and real-time bidding (RTB) are both key strategies in the digital advertising landscape, each offering unique benefits for publishers and advertisers. While header bidding allows publishers to maximize revenue by enabling simultaneous bids from multiple exchanges, RTB provides a streamlined, automated auction process that matches advertisers with available inventory efficiently.