‘Header bidding’ is a way for publishers to hold direct auctions, bypassing the inefficiencies that keep websites from finding the best prices for their ad inventory. First, a site reaches out to its ad server to get an ad. (Whereas direct-sold ads are usually negotiated by a site’s sales team, and served up first to the available ad space.) Next, the rest of the site’s ad space is made available through an ad server (often that server is Google’s DoubleClick for Publishers) in what’s called a “waterfall” sequence. The phrase waterfall stems from the fact that unsold inventory is offered to the top-ranked ad exchange. If it remains unsold, it then goes to the second-ranked exchanged, and so on.
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