Glossary | I | In-app bidding
What is in-app bidding?
In-app bidding is an advanced advertising method where mobile developers can sell their ad inventory in an auction so that all of their advertisers are simultaneously bidding against one another. As a result of the dense competition, the price (CPMs) earned by the developer is much higher than it would be otherwise.
In-app bidding isn’t a new technology, it’s the app-focused version of header bidding, a desktop technology that has been around since 2015. Header bidding allowed web developers to work with third-party header bidding providers to implement code in a web page’s header. This code allowed those providers access to multiple ad exchanges, which could bid simultaneously on a developer’s inventory. Header bidding ensured developers got the maximum price for that impression, while advertisers who valued the inventory most won the highest bid.
Until recently, bidding wasn’t available for mobile apps, but our mobile-first world required a bidding model that’s proven to optimize CPMs for developers, like header bidding has on the web. Technical issues and the lack of actual headers in apps prevented the solution from becoming widespread on mobile, but technological barriers are now gone — and the era of in-app bidding is here.
In-app bidding allows developers to offer their inventory in auctions that take place outside of the waterfall. This means that the inventory developers place with various ad networks can all be bid on at the same time in order to achieve the highest possible CPM.
In-app bidding decreases fragmentation between demand sources because every advertiser is able to bid on ad impressions across many sources simultaneously. The flip side of this is that many different advertisers can see a given developers’ inventory, so the process increases yield for developers as well. Basically, a more democratized advertising solution that allows advertisers to see more developer inventory and that allows developers’ inventory to be available to more advertisers is a good one, because all parties benefit from it.
In-app bidding allows advertisers to compete in real-time for impressions rather than being placed in a hierarchy of demand partners, so developers can ensure they achieve the highest possible CPMs for their inventory. Opening the playing field to all advertisers allows developers to look at each bid on each impression individually rather than looking at an average, meaning the actual highest bidder will always win the impression. It also has the added benefit of increasing CPMs because of the increased competition among advertisers. This will benefit the mobile gaming industry greatly.