Waterfall vs. Bidding Calls: Which Ad Serving Method Reigns Supreme in the Digital Advertising Industry?

Waterfall and bidding calls are two different methods of ad serving in the digital advertising industry. In the waterfall model, publishers offer their inventory to ad networks in a predetermined order, and the ad networks bid on impressions in sequence instead of real-time bidding (RTB), where they bid simultaneously. This sequential method of ad serving is also known as daisy-chaining .

On the other hand, header bidding allows publishers to offer their inventory to multiple demand sources simultaneously. This means that all demand sources get an equal opportunity to bid on inventory, and the highest bidder wins the impression.

The waterfall model was the traditional method of ad serving before header bidding came into existence. In this model, publishers would offer their inventory to ad networks in a predetermined order. The first ad network would have the first right of refusal, and if it declined, the second ad network would be offered the inventory, and so on. This process would continue until an ad network accepted the inventory or until there were no more ad networks left to offer it to.

The problem with this model is that it doesn’t always result in the highest possible revenue for publishers. Ad networks that are lower down in the waterfall may not have access to premium inventory, which means they may not be able to bid as high as other networks. This results in lower revenue for publishers.

Header bidding was introduced as a solution to this problem. In this model, publishers offer their inventory to multiple demand sources simultaneously. This means that all demand sources get an equal opportunity to bid on inventory, and the highest bidder wins the impression. Header bidding has become increasingly popular over the years because it allows publishers to maximize their revenue by giving all demand sources an equal opportunity to bid on inventory .

In summary, waterfall calls are sequential, while bidding calls are simultaneous. Waterfall calls are ranked based on the average historical performance of SSPs/ad networks, while bidding calls allow all demand sources to bid on inventory simultaneously. Header bidding has become increasingly popular over the years because it allows publishers to maximize their revenue by giving all demand sources an equal opportunity to bid on inventory.