In programmatic advertising, in-app bidding is a sales method that allows mobile publishers to offer their ad inventory in an auction where all advertisers can participate simultaneously in a fair competition for ad space.
What is in-app bidding?
A method of programmatic ad sales for mobile publishers in which they sell their ad inventory in a real-time auction. It’s the mobile extension of browser-driven header bidding and is sometimes referred to as in-app header bidding.
Header bidding allows advertisers to bid against one another simultaneously rather than being placed in a “waterfall” hierarchy that pre-determines the priority of bids. By allowing advertisers to compete in real-time for impressions, publishers can guarantee they’ll receive the highest price (CPMs) for their inventory.
Multiple advertisers bid simultaneously in an auction for the available impression. The winning bid then connects the publisher’s and advertiser’s respective ad servers to display the ad creative in that slot to the end-user. All of this happens in real-time when a user clicks on a website or an app.
In mobile apps, however, given a browser-based wrapper isn’t available, in-app bidding uses an SDK (software development kit) integration instead, which is a plugin written in the device’s native OS language (iOS or Android) to perform the same function of inviting advertisers to join the auction.
Header bidding has been around since about 2015, a lifetime in the programmatic advertising ecosystem. Mobile in-app bidding followed around 2019. But before these ad sales techniques took hold, the waterfall method was the standard, which left some significant opportunities for improvement. The next section will break down what led to the shift to header bidding and how the two methods compare.