What is Prebid? A Comprehensive Programmatic Advertising Guide

The term “Prebid” is now a buzzword in digital marketing circles.

However, many publishers and advertisers still have no idea what it means.

Fortunately, this comprehensive guide is here to help. We explain what Prebid is, the benefits it offers, and how you can implement it. We also explore various best practices and how the model compares to other ad-serving methods.

Yes, it sounds technical. But it’s really quite easy once you understand how it works. Here’s everything you need to know.

What Is Prebid?

Prebid is an open-source set of software solutions designed to enable publishers to manage and optimize their programmatic advertising strategies. It's specifically tailored for header bidding, a process where publishers offer their ad inventory to multiple demand sources simultaneously, allowing them to compete in real-time. This competition typically results in higher yield for publishers and better ad placements for advertisers.

Prebid consists of a few key components:

• Prebid.js: A popular and widely-used JavaScript library that runs in the user's browser, enabling client-side header bidding. It provides a simple framework for publishers to configure and run auctions, manage demand partners, and collect bids from various demand sources.
• Prebid Server: A server-side solution that allows publishers to offload header bidding logic and processing to a server rather than executing it in the user's browser. This can result in faster page load times and lower latency during ad auctions.
• Prebid Mobile: An SDK (Software Development Kit) for mobile app developers, enabling header bidding within mobile apps. It extends the benefits of header bidding to in-app advertising environments.
• Prebid Video: A solution specifically designed for video ad inventory, supporting both client-side and server-side header bidding. It helps publishers maximize their revenue from video ads.

Prebid's open-source nature allows for transparency and flexibility, enabling publishers to tailor the solution to their needs and maintain control over their ad inventory. Its adoption has grown rapidly in recent years, with many publishers and ad tech providers contributing to its development and integration.

The process is similar to a unified auction. Participating demand partners compete against each other on a level playing field. Publishers can then use this approach to monetize their ad inventory more efficiently and improve page loading times.

Prebid contrasts substantially with traditional ad-serving methods that rely extensively on a waterfall approach that prioritizes demand sources in a predetermined order. The system takes a more economically rational approach, allowing all demand sources to bid simultaneously, ensuring the highest bidder (the brand that wants the advertising space the most) wins each impression.

The Benefits Of Using Prebid

The benefits of using Prebid are substantial. Publishers and advertisers can leverage their existing platforms significantly with the technology. Here’s how:

Greater Control Of Ad Inventory

For instance, Prebid facilitates more control of ad inventory. Publishers can see which demand partners are bidding on their space and at what price, giving them more control over the real estate for ads and pricing strategy.

Improved User Experience

This improved oversight also enhances the user experience. Prebid reduces the likelihood of ad fraud and ensures that the most relevant and high-quality ads are served to visitors, boosting the quality of their interactions with your web pages.

Increased Revenue Potential

As mentioned above, because Prebid lets multiple demand partners bid for each impression, it increases competition and drives up prices, resulting in higher ad revenue for publishers. Economically speaking, publishers eliminate “consumer surplus” by charging each advertiser the maximum they are willing to pay for the space on the site. Publishers set their own auction rules and floor prices, giving them more control over the bidding process on your platform. Ultimately, it means better resource allocation and priority for brands that can benefit from your platform’s ad inventory the most.

Access More Ad Formats

Prebid also supports various ad formats and platforms, including display, video, native, mobile web, and app. As such, it is applicable across multiple website properties, giving users a more consistent experience.

Resources For Testing And Debugging

Publishers who use Prebid can also get access to tools and resources for testing, debugging, and troubleshooting. These make it easier to help advertising clients and streamline the marketing process for all stakeholders.

Reduced Latency And More Efficient Ad Serving

Lastly, Prebid reduces the need for multiple ad calls while enabling real-time bidding. The result is faster page loading times and a better user experience.

How To Implement Prebid On Your Website Or Platform

To implement Prebid on your website or platform, you’ll need to follow several steps.

Step 1: Choose A Prebid Wrapper

The first step is to choose a wrapper. Prebid offers several, each with unique features and benefits.

Prebid.js is the original and most widely used Prebid wrapper. It is a JavaScript library that runs on the publisher's web page and supports over 300 demand sources and fifty analytics adapters. It is easy to install and customize but requires technical knowledge and maintenance. It also adds some latency to the page load time due to its client-side execution.

Prebid Server is a server-side version of Prebid.js that runs on a cloud-hosted server instead of the publisher's web page. It reduces latency and improves user experience by moving most of the auction logic to the server. However, it requires expert setup and configuration, as well as additional fees for hosting and bandwidth. You also get fewer demand sources and analytics adapters than Prebid.js.

You can also choose Prebid SDK. This software development kit enables publishers to implement header bidding in their mobile apps. You can use it for client- and server-side auctions but, again, it requires expert knowledge and approval.

Step 2: Integrate Your Prebid Wrapper

Once you’ve chosen a Prebid wrapper, the next step is to integrate it into your website’s ad tags to enable real-time bidding.

First, download and customize the Prebid.js file. (The process will be different if you use another wrapper). Then, add the Prebid.js code snippet to your webpage. When you do this, the code snippet will load the Prebid.js file from your server or content delivery network (CDN) and initialize it automatically.

Step 3: Request Bids From Advertisers

The third step is to request bids from bidders using the “pbjs.requestBids” function. This function will send requests to all the bidders defined in your ad units and collect their responses within a specified timeout period.

At this juncture, you also need to create an array called “adUnits,” which contains one or more objects that define each ad unit on your page. Each ad unit object has a unique “code” property that identifies it on your page, as well as a “media types” property that specifies what type of ads it can accept (such as banner, video, native, etc.).

Additionally, each ad unit object has a “bids” property containing an array of objects that define each bidder for that ad unit. Each bidder object has a “bidder” property that matches the name of the adapter module for that bidder in prebid.js, as well as other properties specific to each bidder's requirements (such as placement ID, publisher ID, and so on). You’ll need to learn how this works in detail before you can move forward.

If you need to add demand partners, you can by integrating their bidder adapters into the Prebid wrapper. Brands can then take part in the unified auction.

Step 4: Set Up Price Floors

Next, you’ll want to set up price floors. These ensure the higher bidder wins each impression.

There are two ways to set up price floors in Prebid: using your own logic or using a third-party vendor who can provide optimized floors based on data and algorithms.

The advantage of using your own logic for setting price floors is that you have full control over how they are calculated and applied. You can also use any data source or criteria that you have access to or prefer.

Unfortunately, this approach requires much more time and effort. Plus, you need some technical skills to do it properly, including knowledge of how header bidding works.

Using a third-party vendor who specializes in providing optimized floors based on data provides a different set of challenges. In this setup, you must include the Price Floors Module and the vendor’s adapter when building the Prebid.js package. The best way to do this is to add “priceFloors” and “floors[ProviderName]” (where you replace “ProviderName” with the name of the vendor’s adapter) to the list of modules in the “gulp build” command.

Once you’ve done that, you can configure the modules with your settings. You can do this by ad unit or globally, depending on your preferences.

Step 5: Testing And Optimization

The last step is to test and optimize Prebid to see if it works correctly. Keep track of revenue before and after implementation. Successful pilots should generate noticeable increases quickly for large platforms.

If you get stuck on any of these steps, our team of ad ops professionals is ready to help.

What is Prebid vs post bid?

Prebid and Post-bid are two different approaches to header bidding in programmatic advertising.

Prebid refers to the process of conducting an auction among demand partners before the ad server is called. In Prebid, multiple demand partners submit their bids in real-time, and the highest bidder wins the impression. Prebid offers the advantage of increased competition, higher bids, and increased revenue for publishers.

Post-bid, on the other hand, involves running the auction after the ad server has been called. In this approach, the ad server calls all demand partners to submit their bids. The winning bid is then selected and served. Post-bid offers the advantage of faster page load times because all ad calls are handled by the ad server.

While Prebid is the more common header bidding approach, Post-bid has also gained traction in recent years as an alternative. Ultimately, the decision to use Prebid or Post-bid depends on the specific needs of a publisher and their advertising strategy.

Prebid And The Future Of Programmatic Advertising

Given its inherent advantages, Prebid is fast becoming the platform of choice for advertisers and publishers. Many experts predict it will grow significantly over the coming years, offering the industry a newer, more efficient model for generating ad revenues online.

Here are some trends we foresee for the near future.

Continued Growth Of Mobile Advertising

According to figures, a staggering 91.40 percent of people worldwide own a smart or feature phone. Hence, experts predict programmatic advertising will become more mobile-focused over the coming months. Prebid's ability to work across multiple devices and platforms makes it well-suited for this shift.

Increased Adoption Of Header Bidding

It is also likely that publishers and advertisers will come to more fully understand the benefits of header bidding, making it the default programmatic advertising method in the future.

Prebid understands this, which is why it is evolving to meet the changing needs of the programmatic advertising industry. Some of the recent developments include:

• Prebid Server: a server-side header bidding solution that reduces browser load time and enables support for more demand partners
• Prebid Identity: a suite of solutions that help publishers manage user identity in a privacy-compliant way
• Prebid Analytics: a tool that publishers use to monitor and troubleshoot their header bidding setup
• Prebid Video: a solution that supports instream video ads on desktop and mobile devices

More Demand Partners And Bid Sources

Lastly, the programmatic advertising ecosystem is becoming more complex. Publishers may rely on more than one demand partner and bid source to increase revenues. Hence, ad allocation systems must adapt to this reality and become more cross-functional.

Prebid Versus Other Ad Serving Methods

Of course, Prebid isn't the only game in town. Many other companies offer advanced solutions designed to meet publishers’ revenue requirements. For instance, Google Ad Manager and Amazon Publisher Services are both ad-serving solutions that enable publishers to monetize their digital content through programmatic advertising.

This section explores the pros and cons of each, letting you decide which offers the most value.

Prebid

Pros:

• Open-source header bidding solution that allows publishers to increase competition and revenue by allowing multiple ad exchanges to bid on ad inventory simultaneously.
• Provides more transparency and control for publishers by allowing them to manage their own auctions and set their own rules.
• Free to use, and there are no platform fees.

Cons:

• Requires technical knowledge to set up and manage, and it can be time-consuming to maintain.
• May not be as scalable as other ad-serving solutions, especially for large publishers with high traffic volumes.
• Requires publishers to have relationships with multiple ad exchanges, which can be challenging to manage.

Google Ad Manager:

Pros:

• Google Ad Manager (GAM) is a widely used ad-serving solution with a robust feature set, including ad trafficking, targeting, reporting, and optimization.
• Has access to a large pool of demand partners, making it easy for publishers to monetize their ad inventory.
• Provides detailed analytics and reporting, allowing publishers to optimize their ad campaigns.

Cons:

• Takes a cut of revenue earned through the platform, and fees can be significant for smaller publishers.
• Closed ecosystem, meaning that publishers have less control over their auctions and bidding rules.
• May not be as transparent as other solutions, as it doesn't disclose bid data from other demand sources.
• Difficult to set up and maintain without the right ad ops knowledge and team

Amazon Publisher Services:

Pros:

• Offers a range of advertising solutions, including header bidding, programmatic guaranteed, and direct sales.
• Provides access to Amazon Demand, which can be highly valuable for some publishers.
• Offers robust analytics and reporting, allowing publishers to optimize their ad campaigns.

Cons:

• Takes a cut of revenue earned through the platform, and fees can be significant for smaller publishers.
• Is a closed ecosystem, meaning that publishers have less control over their auctions and bidding rules.
• May not be as transparent as other solutions, as it doesn't disclose bid data from other demand sources.

Conclusion

In summary, Prebid is revolutionizing the programmatic advertising industry by offering an Open-source solution that makes it easy for advertisers to engage in real-time bidding. By eliminating the ad waterfall approach, it increases revenue by encouraging more competition among brands for limited ad inventory.

At Snigel, we offer a full suite of advanced ad tech solutions to help our clients stay ahead of the curve. Whether you're looking to implement header bidding or other monetization strategies like Smart Refresh and Adaptive Ads, our expert team can help you build a unique strategy tailored to your specific needs. As a Google MCM Partner and a Google AdX Partner, we have access to premium ad campaigns, ensuring that your website is always ready for revenue growth and the latest SEO best practices.

In addition to prebid, we offer a range of other advanced technologies to help you maximize your ad revenue, including machine learning algorithms and real-time data analysis tools. With our advanced ad tech stack, you can rest assured that your website is always optimized for revenue growth and user experience.

If you're ready to take your ad management to the next level, get in touch today. Our expert team is ready to guide you through the process and help you achieve your revenue goals. Don't wait - start maximizing your ad revenue with Snigel's advanced ad tech solutions today!