In digital advertising, every millisecond and every dollar count. Publishers are constantly looking for ways to maximize revenue without hurting user experience. One technology that has gained attention in recent years is server-side bidding (SSB).
While client-side bidding methods like header bidding have been around for a while, server-side bidding changes the game by moving the auction process from the user’s browser to a server. This small change in location has big implications for speed, performance, and how publishers interact with demand partners.
Let’s break down what server-side bidding is, how it impacts revenue, and what challenges you need to know before adopting it.
What is Server-Side Bidding?
Server-side bidding is a programmatic advertising method where ad auctions happen on a remote server rather than in the user’s browser. Instead of the browser sending bid requests to multiple demand partners directly, it sends a single request to an ad server. That server then communicates with different ad exchanges, SSPs (Supply Side Platforms), and demand partners to conduct the auction.
Once the server collects bids, it sends the winning ad back to the browser for display.
This approach contrasts with client-side bidding, where all of the auction mechanics take place in the browser using JavaScript, often resulting in slower load times and more strain on the user’s device.
Revenue Benefits of Server-Side Bidding
1. Improved Page Load Times
Slow-loading pages can hurt ad viewability and revenue. Server-side bidding reduces the amount of work happening in the browser, allowing pages to load faster. Faster load times can mean better user experience and improved ad viewability, which often translates into higher CPMs.
2. Access to More Demand Partners
In client-side bidding, there is a limit to how many demand partners you can integrate without hurting performance. Server-side setups can handle more demand partners because the heavy lifting happens on the server, not the browser. More competition often leads to higher bids.
3. Better for Mobile
Mobile devices are more sensitive to performance issues. Server-side bidding takes the load off mobile browsers, improving speed and reducing battery drain, which can keep users engaged longer and increase ad impressions.
4. Higher Auction Participation
Some demand partners prefer server-side connections because it allows them to process requests faster and handle more traffic. This can increase auction participation and help publishers secure higher winning bids.
5. Reduced Latency in Ads
Server-side bidding can process multiple requests in parallel at high speed. Reduced latency can increase the number of bids received before the auction closes, improving competition and potentially raising revenue.
Technical Challenges of Server-Side Bidding
While the revenue benefits are attractive, server-side bidding comes with technical and strategic hurdles.
1. User Data Loss
One of the biggest drawbacks is reduced access to user cookies and browser-based identifiers. Because the auction happens outside the browser, server-side bidding may not have the same level of user-level targeting data, leading to lower bid prices from certain advertisers.
2. Complex Setup
Integrating server-side bidding is more technically complex than client-side solutions. Publishers may need specialized developers or partners to implement and maintain the system.
3. Transparency Concerns
When the auction happens in the browser, publishers can see all the bid responses and activity. Server-side setups can be more opaque, depending on the vendor, making it harder to monitor performance and detect discrepancies.
4. Costs of Server Infrastructure
Running auctions on the server side requires robust infrastructure, which can mean additional costs. Whether you host it yourself or use a vendor, there’s a financial investment to consider.
5. Impact on Buyer Demand
Some advertisers may prefer client-side bidding for better targeting capabilities. This means certain demand partners might bid less aggressively on server-side inventory, affecting fill rates or CPMs.
When Should Publishers Consider Server-Side Bidding?
Server-side bidding is not a one-size-fits-all solution. It works best for publishers who:
- Have a high volume of impressions and want to optimize performance for speed-sensitive users (like mobile audiences).
- Want to integrate with multiple demand partners without hurting page load speed.
- Can invest in the technical resources required for setup and maintenance.
- Have a strong first-party data strategy to offset the loss of third-party cookie data.
Some publishers use a hybrid approach where they combine client-side and server-side bidding to get the best of both worlds. This allows them to keep the rich targeting data from client-side requests while benefiting from the speed and scale of server-side connections.
Key Takeaways
- Server-side bidding moves ad auctions from the browser to a server, improving speed and scalability.
- It can increase revenue by enabling more demand partners, better mobile performance, and faster load times.
- Challenges include loss of user-level data, higher complexity, transparency concerns, and infrastructure costs.
- A hybrid setup can help publishers balance performance and targeting needs.
- Before adoption, publishers should evaluate their audience type, technical resources, and first-party data strategy.
Glossary
Client-Side Bidding: An auction process where the bidding happens in the user’s browser using JavaScript.
Server-Side Bidding (SSB): An auction process that happens on a remote server, not in the browser.
Latency: The delay between sending a request and receiving a response.
CPM (Cost Per Mille): The amount advertisers pay per thousand ad impressions.
SSP (Supply Side Platform): A platform that helps publishers manage and sell their ad inventory to multiple buyers.
Hybrid Bidding: A mix of client-side and server-side bidding to leverage the strengths of both methods.
FAQs
Q1: Is server-side bidding better than header bidding?
It depends on your priorities. Server-side bidding is faster and can handle more demand partners, but it may have less precise targeting data than client-side header bidding.
Q2: Does server-side bidding require a lot of technical expertise?
Yes. Setting it up can be complex, especially if you’re hosting your own server. Many publishers work with a technology partner to manage it.
Q3: Will server-side bidding replace client-side bidding entirely?
Unlikely in the near term. Many publishers are using hybrid approaches to balance performance and targeting.
Q4: How does server-side bidding impact revenue?
By improving speed and allowing more bidders, it can lead to higher CPMs and fill rates. However, results vary depending on audience, ad formats, and demand partners.
Q5: What’s the biggest drawback of server-side bidding?
The loss of some user-level data due to the auction happening outside the browser, which can impact targeting precision.
