Boosting App Revenue: Choosing Between Header Bidding and Waterfall
Is your app’s ad space reaching its full potential? You built a fantastic app, but you just know it can be monetized even further.
Guess what? There’s a way to unlock that hidden potential!
Let us introduce you to two concepts all publishers should always be aware of. The traditional waterfall method and the innovative header bidding path to monetization.
Waterfall might be the familiar path, but it can leave you money on the table.
Header bidding, on the other hand, is a real-time auction for your ad space. Imagine advertisers in a bidding frenzy, pushing the value higher with every bid to reach your engaging audience.
Ready to transform your app’s future revenue potential? Read below to dive deeper into how header bidding and waterfall bidding work.
What Is Waterfall Bidding?
Traditionally, waterfall bidding has been the go-to method for mobile advertising. It operates on a sequential bidding process where ad inventory is offered to advertisers in a predetermined order.
Something like: Ad Network A (Top Choice) > Ad Network B (Second Choice) > Ad Network C (Third Choice) > and so on …
The highest-priority advertiser gets the first look; if they pass, the next in line gets a chance, and so on. This method ensures simplicity and is easy to implement, making it initially appealing to many publishers.
It’s pretty easy to understand why it has been such a good model for so many years.
Pros of Waterfall Bidding
The main pro of waterfall bidding is its simplicity and ease of implementation. For many publishers, especially those not equipped with a massive engineering team or those new to app development, waterfall bidding offers a straightforward and manageable implementation.
It’s easy to set up because it follows a logical sequence and doesn’t require real-time bidding (RTB) technology. Publishers can set up their list of advertisers based on past experiences and let the system run its course.
Its initial appeal, particularly in its early days, was significant. Publishers appreciated the control it gave them over the ad-selling process, and the method’s simplicity meant that it could be implemented quickly. It promised a way to fill ad spaces efficiently, ensuring that unsold inventory was minimized.
To summarize:
- Simplicity: Its straightforward nature makes it easy for publishers to implement and manage.
- Familiarity: Many publishers are accustomed to this model, having used it for years.
On the flip side, while waterfall bidding’s simplicity is great, it does have a catch: it doesn’t let every advertiser throw their hat in the ring at the same time.
This means you might not get the best price for your ad space since not everyone is bidding together.
Cons of Waterfall Bidding
Waterfall auctions work okay, but they have some problems. One big issue is that they don’t let all the buyers compete at the same time, so you might not make as much money from your ads.
If a buyer really wants your ad slots but they’re later in the line, they won’t get a chance to offer a higher price, so you’re out of luck.
Also, this method can make your app slow. Every time an ad has to go through the line of networks, it takes a bit longer for your ads to load.
As you may know, slow apps can frustrate users!
To summarize:
- Lower Revenue: The sequential approach can result in lower ad revenue as higher-paying opportunities can be missed.
- Inefficiency: It’s slower and can result in unsold inventory, affecting fill rates and overall revenue.
- Latency: Each step in the process adds delay, potentially harming the user experience.
Considering these challenges with waterfall auctions, like missed opportunities for higher revenue and the risk of slowing down your app, it’s clear we needed a smarter approach.
That’s where header bidding comes into play, offering a more competitive and efficient way to sell your ad slots.
What Is Header Bidding?
Header bidding emerged as a solution to the limitations of the waterfall model. It allows publishers to offer their ad inventory to multiple advertisers simultaneously before making calls to their ad servers.
This real-time bidding on ad inventory ensures that publishers get the best possible price for each ad impression.
Pros of Header Bidding
After seeing the limitations of waterfall bidding, it’s refreshing to explore the brighter side of header bidding. This approach injects a healthy dose of competition, transparency, and fairness into the bidding process.
It’s like opening up the floor at an auction where every bidder shouts their offer simultaneously, driving up the potential for better deals. In most cases, much better than lining up and taking the first bidder.
What’s really cool about header bidding is how it evens out the playing field. It doesn’t matter if an advertiser is a big shot or a small player. Everyone gets to throw their hat in the ring.
This fairness makes the whole ad world a lot healthier.
To summarize:
- Increased Revenue: By allowing multiple advertisers to bid at once, publishers can maximize their ad revenue.
- Control and Transparency: Publishers gain more control over their inventory and insight into how much their inventory is truly worth.
- Fairness: Every advertiser has an equal opportunity to bid on the inventory, promoting a more competitive marketplace.
While header bidding might sound like the perfect match for you, it’s not without its challenges.
Just like any strategy, there are a few bumps in the road that we should look into. Let’s take a closer look at the other side.
Cons of Header Bidding
Integrating header bidding into your mobile app involves a series of strategic steps, each crucial for juicing up ad revenue while maintaining a seamless user experience.
It starts with integrating the right SDKs or APIs without affecting your app’s performance and choosing a compatible header bidding partner for a smooth operation. You’ll need to manage bids carefully, setting rules and priorities to ensure efficient processing without delays.
Already, that sounds like a lot, but we are just getting started!
You will need to also address latency issues to avoid impacting user experiences. Having incredible analytics skills is also important for tweaking your strategy in real time, ensuring the system works well across all device types and sizes.
Additionally, complying with data protection laws (like GDPR) and securing your header bidding setup is essential for legal and user safety.
Getting header bidding right in your app is all about mixing tech know-how with great planning and careful oversight.
To summarize:
- Complexity: Implementing header bidding is technically more complex and can require significant resources.
- Page Latency: More scripts and bid requests can slow load times, potentially affecting the user experience.
- Resource Intensive: Requires more sophisticated technology and infrastructure to manage effectively.
Choosing the Right Model for App Publishers
Unfortunately, there is not a one-size-fits-all solution for choosing whether to go with header bidding or sticking to the waterfall method – it depends on time, value, and resources you have handy.
Think about who’s using your app and how big your audience is. Do you have the developer staff on your team to set up and manage something as intricate as header bidding? How much time and energy are you willing to invest to squeeze out every last drop of ad revenue?
You might find yourself looking at a mix of both worlds, a hybrid model, or even checking out a quick solution through a S2S connection on Amazon TAM or Nimbus.
Whatever you decide, know that most publishers are moving more and more over to the header bidding model because it makes more revenue for the developer.
Final Thoughts
Exploring both header bidding vs waterfall bidding is important for app publishers looking to get the most out of their ad monetization.
Each approach has its own set of strengths and weaknesses, helping publishers make informed decisions in a complex and changing advertising environment.
So what’s the aim for you?
To find the sweet spot that boosts ad revenue without compromising your user satisfaction and attention.
As the ecosystem keeps evolving, staying adaptable and open to change is crucial for any publisher wanting to stay ahead. There’s a clear move towards header bidding, leaving the traditional waterfall methods behind.
Publishers who dedicate time and resources to this transition often see higher returns and gain valuable insights into their app’s performance. This deeper understanding can fuel further improvements and investments in their app’s ecosystem.
For more tips on enhancing your app’s growth beyond the waterfall vs. header bidding, look at our guide on App Store Optimization (ASO) and how it can skyrocket your growth.
