IX Perspectives

Header Bidding Best Practice: Net vs Gross Bids

If you’re a publisher engaging in header bidding, you should never take transparent auction mechanics for granted. Welcome net vs gross bid pricing.

As established in an earlier blog, net price represents the bid price offered, with sell-side margin factored in by the vendor, while gross price does not build in the cost of the vendor’s service. This means net prices reflect the dollar value going directly to the publisher’s pocket while gross prices do not.

Like I penned in my previous post, when gross bids are dictating where your inventory is awarded, you are at risk of not getting the best price possible. This practice institutes an inefficiency that header bidding was intended to solve in the first place, which it does solve, when implemented correctly! It also defies the simple idea of fair competition: every participant needs to be evaluated under the same guidelines for the environment to be truly competitive.

One of the primary benefits of header bidding for a publisher is the ability to enable your adserver to make an optimal decision on a per auction basis. This means concurrently evaluating all buying opportunities in real time, as opposed to awarding impressions in succession, based off of historical average statistics.

If the adserver is expected to make the best decision possible, it needs to know exactly what is going to go into your pocket – this means all prices signaled to your ad server must be in net terms, factoring in all fees that might deteriorate the value of a bid from one demand source versus another. This guarantees the selection process is solely in the best interest of the publisher.

With anticipation of Q4 spend, be sure to audit your partners and confirm all of them are on a level-playing field and submitting net bids to your adserver. In turn, this will give you the peace of mind that you are getting the best price the market is willing to bear in your bottom line.

Ensuring all partners are submitting net and not gross bids will efficiently monetize your inventory while maximizing your yield. This is a header bidding best practice, and as a publisher, you need to know the true dollar value you’re garnering. If you’re looking for some simple ways to check for price discrepancy issues, please reach out to your account team!

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