Prebid is revolutionizing how publishers manage programmatic advertising.
It is an open-source technology enabling publishers to implement header bidding on their websites and apps. This technology directly drives additional demand from leading ad exchanges to publishers' ad servers, optimizing ad revenue.
As of 2023, Prebid was the second most popular header-bidding technology in the world, being preferred by 1% of the top 1 million websites in the world.
Since its inception, Prebid has introduced a level of transparency that was previously absent, allowing both large and small publishers to tailor their ad strategies to their specific needs. This has led to a more competitive and efficient marketplace, benefiting publishers and advertisers alike.
We take a deep-dive into this header bidding solution, its components, how it works, and understand why it's become a cornerstone of the programmatic advertising industry.
What Is Prebid?
Prebid is an open-source set of software solutions that enables publishers to manage and optimize their programmatic advertising strategies. It is specifically designed for header bidding, a process where publishers simultaneously offer their ad inventory to multiple demand sources, allowing them to compete in real time. This competition typically results in higher yields for publishers and better ad placements for advertisers.
How Does Prebid Work?
Prebid operates on the principle of header bidding, which represents a paradigm shift from the traditional waterfall auction methods in digital advertising.
In waterfall auctions, ad impressions are offered to demand partners one at a time in a predetermined order. However, header bidding revolutionizes this process by enabling multiple demand partners to bid on each ad impression simultaneously. This results in greater competition, which can significantly increase the potential for higher ad revenues for publishers.
Prebid is a highly versatile framework that works across several platforms. For mobile apps, Prebid works in a manner similar to desktop ads, allowing for in-app header bidding. It can be implemented on accelerated mobile pages (AMP) to monetize them through AMP ads. Prebid also supports video ads for both desktop and mobile ad platforms through video header bidding.
Let’s look at how Prebid works in a little more detail.
Step-by-Step Breakdown of the Prebid Process
- Including Prebid Library: The publisher includes the Prebid library in the website's header, typically through a script tag in the HTML code.
- Configuring Bidders and Ad Units: Publishers need to configure the specific bidders they want to work with and set up the ad units on their pages. This setup involves specifying parameters for each bidder, which can vary.
- Bid Request and Auction: When a user visits the website, Prebid sends bid requests to the specified demand partners. Each partner responds with their bid price and other relevant information. Prebid then runs an auction to determine the highest bid for each ad impression.
- Sending Winning Bid to Ad Server: The highest bid, along with the bidder's information, is sent to the ad server (like Google Ad Manager). The ad server then serves the winning ad ops to the user's browser.
Benefits of Prebid for Publishers
Prebid has several benefits for publishers including:
1. Increased Revenue Potential: Prebid's header bidding approach allows multiple demand partners to bid for each impression simultaneously. This increased competition drives up prices, leading to higher ad revenue for publishers. By enabling real-time bidding, Prebid ensures that each ad space is sold at the best price.
2. Greater Control Over Ad Inventory: Publishers using Prebid tend to have greater control over their ad inventory. They can see which demand partners are bidding and at what price. This transparency allows publishers to make informed decisions about their ad space and its pricing strategies, ensuring optimal utilization of their digital real estate.
3. Access to a Wider Range of Ad Formats: Prebid supports various ad formats, including display, video, native, mobile web, and app-based ads. This versatility makes it applicable across multiple web properties and platforms, offering a consistent and comprehensive advertising experience.
4. Resources for Testing and Debugging: Publishers can access tools and resources for testing, debugging, and troubleshooting within the Prebid framework. These resources simplify the process of managing advertising clients and streamline the marketing process, making it more efficient for all stakeholders.
5. Reduced Latency and Efficient Ad Serving: Prebid minimizes the need for multiple ad calls, enabling faster and more efficient real-time bidding. This efficiency leads to quicker page loading times, enhancing the overall user experience and potentially improving SEO rankings.
6. Transparency and Flexibility: Being an open-source solution, Prebid offers transparency and flexibility, allowing publishers to tailor the solution to their specific needs. This openness also fosters a community-driven approach to development and problem-solving. Prebid is also data-privacy compliant, allowing support for the unified ID 2.0 common ID.
7. Economic Rationality: Prebid adopts a more economically rational approach than traditional ad-serving methods. By allowing all demand sources to bid simultaneously it ensures that the highest bidder wins each impression, leading to a more efficient allocation of ad space.
How to Implement Prebid?
Implementing Prebid involves several steps, each crucial for setting up a successful header bidding system. Here's a basic guide to help publishers get started:
1. Integrate the Prebid Header Bidding Wrapper
The prebid wrapper or prebid.js is an open-source javascript file that enables header bidding. To integrate it into a website, simply download the Prebid.js file and add the Prebid.js code snippet to your website’s HTML code.
2. Configure Ad Units and Request Bids
Next, define ad units on your page, ensuring the correct parameters are sent to the demand sources. Each ad unit should have a unique code and specify the type of ad it can accept (banner, video, native, etc.). Use the pbjs.requestBids function to send bid requests to all defined bidders and collect their responses.
3. Set Up Price Floors
Establish price floors to ensure that the highest bidder wins each impression. You can use your own logic or a third-party vendor for optimized floors based on data and algorithms.
4. Testing and Optimization
Test your setup to ensure it's working correctly. Monitor revenue before and after implementation to gauge success. Utilize Prebid's debug functionality by adding ?pbjs_debug=true to your URL for detailed information in the console.
5. Complete Ad Server Setup
For Google Ad Manager (GAM), create line items that match the key-value pairs received from Prebid (e.g., bidder name and bid amount). Ensure that these line items are correctly set up in GAM for ad selection.
Example Code:
Example Bid Request:
Is Implementing Prebid.js Challenging?
Implementing Prebid.js can indeed be challenging, especially for publishers who are new to the world of programmatic advertising. While Prebid.js has streamlined the header bidding process, making it more accessible, it still requires a certain level of technical expertise and resources.
Here are a few common problems faced by publishers while implementing Prebid.js:
Setting Up Line Items: This is a significant challenge, particularly for smaller publishers. Setting up line items manually is time-consuming and requires expertise. Incorrect setup can lead to discrepancies and revenue losses.
Handling Google’s API: Implementing Prebid.js often involves working with Google's API, which requires some coding knowledge. This can be a hurdle for smaller publishers without a dedicated development team.
Setting Up Real-Time Analytics: To maximize revenue, publishers need in-depth data on their creatives. Creating a system compatible with all demand partners for collecting and analyzing this data can be complex and requires technical know-how.
Prebid vs. Post Bid
Postbid is an approach to programmatic advertising wherein the demand partners compete in an auction after the ad server has declined to choose a line item. Below are the main advantages and disadvantages of the two approaches:
Prebid
Advantages:
- Increases competition, potentially leading to higher ad revenues.
- Offers more transparency and control for publishers.
- Ensures that the highest bidder wins the impression, maximizing the value of each ad slot.
Disadvantages:
- Requires technical knowledge for setup and management.
- Can be time-consuming to maintain, especially for publishers with high traffic volumes.
- Necessitates relationships with multiple ad exchanges, which can be challenging to manage.
Post Bid
Advantages:
- Offers faster page load times as all ad calls are handled by the ad server.
- Simpler to implement for some publishers, especially those with existing relationships with specific ad servers.
Disadvantages:
- May result in lower revenue compared to Prebid, as the bidding is not conducted in real-time.
- Less competitive, as it does not always ensure the highest possible bid for each impression.
Prebid vs Waterfall
Prebid and Waterfall represent two fundamentally different strategies for managing and selling ad inventory. These approaches, each with their distinct mechanisms and impacts, offer varied options for publishers in the programmatic advertising space.
Prebid
Advantages:
- Increases competition, potentially leading to higher ad revenues.
- Offers more transparency and control for publishers.
- Ensures that the highest bidder wins the impression, maximizing the value of each ad slot.
- Allows easy tracking of ad performance through integration of analytics adapters
Disadvantages:
- Requires technical knowledge for setup and management.
- Can be time-consuming to maintain, especially for publishers with high traffic volumes.
- Necessitates relationships with multiple ad exchanges, which can be challenging to manage.
Waterfall
Advantages:
- Simpler to implement and manage compared to Prebid.
- Familiar and traditional methods for many publishers.
Disadvantages:
- It often results in lower revenue than Prebid, as it does not leverage real-time bidding.
- Less competitive than its Prebid counterpart
- Can lead to latency issues, as each demand partner is called sequentially.
Prebid vs Header Bidding
Prebid and header bidding are often used interchangeably, as they refer to specific aspects of the same technology. However, there is a subtle difference between the two.
Prebid
Prebid refers to a specific open-source software that facilitates header bidding. It's a framework that allows publishers to integrate multiple demand partners into their ad inventory auction process. Prebid.js, a popular implementation of Prebid, streamlines the setup of header bidding on websites and mobile apps.
Header Bidding
Header Bidding is a broader term that describes the overall technique of offering ad inventory to multiple demand partners simultaneously before making calls to ad servers. This approach contrasts with traditional waterfall bidding, which aims to maximize revenue by letting demand partners compete in real-time.
Final Thoughts
The Prebid platform has transitioned from a simple concept to a comprehensive suite of products, including Prebid.js, Prebid Server, and Prebid Mobile. This evolution reflects the dynamic nature of the advertising industry and Prebid's role in addressing its challenges.
At the same time, we’ve seen how complex implementing Prebid can be for publishers who lack the technical resources to handle it.
AdSense & GAM Publishers, Publift offers a bridge over these complexities, providing expert services to enhance ad revenue and streamline ad management. Publift has been helping publishers increase their revenue by an average of 55% since 2015.
Get in touch with us today to understand how we can help you grow your site.
FAQs
Is Prebid an Ad Exchange?
No, Prebid is not an ad exchange. Prebid is a set of open-source software solutions designed to facilitate header bidding, a specific type of programmatic advertising strategy wherein various demand sources bid simultaneously on a publisher’s ad inventory in real time.
Ad exchanges, on the other hand, are platforms where ad space is bought and sold.
Is Prebid Free?
Yes, Prebid is free to use. As an open-source project, Prebid is available at no cost. It allows publishers and developers to access its source code, contributing to its development and customization.
Is Prebid a Wrapper?
In some ways, yes, Prebid can be described as a wrapper. In the context of programmatic advertising, a wrapper is a tool that encapsulates or 'wraps' around various demand sources or bidder adapters. Prebid.js, is a type of wrapper that integrates multiple bidder adapters, allowing them to participate in a unified auction on a publisher's website.