Header Bidding & Open Bidding Economics: Understanding Costs, Rev Shares, and Maximizing Profitability

Header bidding has transformed digital advertising by enabling publishers to maximize revenue through real-time competition among multiple demand sources. However, while it promises higher CPMs and better yield management, the true cost of implementation—including tech fees, SSP rev shares, and infrastructure expenses—can eat into profits if not managed properly. Understanding how revenue is split between publishers, SSPs, and demand partners, as well as the hidden costs of maintaining a header bidding setup, is crucial for publishers looking to optimize their monetization strategy. In this post, we’ll break down the financial mechanics of header bidding, from rev shares and platform fees to the impact of auction dynamics on publisher earnings.

Pros & Cons of Open-Source Header Bidding

✔ Pros:

• No licensing or revenue share fees (unlike managed wrapper solutions).

• Full control over bidder settings and revenue optimizations.

• Transparency—you know exactly how your auctions are running.

• More demand flexibility—can integrate any demand partner without being locked into a vendor.

  
  

❌ Cons:

• Requires technical expertise to set up and maintain.

• Higher initial costs for developer integration.

• Ongoing management needed to ensure revenue maximization and troubleshoot issues.

Let's break it down...

Cost Factor	Description	Cost Type
Software Fees	None (Prebid.js and other open-source solutions are free to use)	$0
Developer/Integration Costs	Setting up, customizing, and integrating Prebid.js requires developer resources. You may need to hire in-house developers or contractors.	Varies ($2,000 - $10,000+ one-time or ongoing salaries)
Hosting & Infrastructure	If you self-host the Prebid.js wrapper or Prebid Server, you may have server costs (e.g., AWS, Google Cloud).	Varies ($50 - $500+ per month, depending on traffic volume)
Ongoing Maintenance	Managing bidders, timeout settings, price floors, and debugging issues requires continuous technical oversight.	Varies (developer costs or agency fees, $1,000 - $5,000 per month if outsourced)
Demand Partner Integration	Setting up direct demand partners (SSPs, DSPs) may require custom implementations and testing.	Time-intensive, but no direct cost
Latency Optimization	Improper setup can slow down page loads, impacting user experience and revenue. Requires regular monitoring and tuning.	Developer time or performance monitoring tools

Who Should Use Open-Source (Prebid.js)?

✅ Large publishers with dedicated ad tech teams (e.g., news sites, media companies) 

✅ Publishers who want full control over demand partners and pricing 

✅ Those who want to avoid long-term revenue-sharing agreements with managed wrapper providers

Who Should Not Use Open-Source?

❌ Small to mid-sized publishers with limited tech resources

❌ Publishers looking for "hands-off" solutions (managed wrappers are easier)

If you’re considering Prebid.js and need help with setup or a cost breakdown for outsourcing vs. in-house management, let us know!

Open Bidding: Google’s Alternative to Header Bidding

Open Bidding, formerly known as Exchange Bidding, is Google’s server-side alternative to header bidding, designed to streamline the auction process within Google Ad Manager (GAM). Unlike traditional header bidding, which runs auctions directly in the browser, Open Bidding conducts auctions on Google's ad servers, reducing latency and page load times. However, while Open Bidding offers a simplified integration and access to premium demand, it comes at a cost—Google takes a rev share (typically around 5-10%) on winning bids, which can eat into publishers' margins. Additionally, Open Bidding lacks the transparency and control that client-side header bidding provides, making it less attractive for publishers who prioritize auction visibility and competitive bidding dynamics. Understanding the trade-offs between Open Bidding and header bidding is crucial for publishers looking to optimize their programmatic revenue.

Here's a breakdown on fees for Open Bidding...

1. Google Open Bidding Fees (5-10%)

• Google charges a fee to SSPs (exchanges) that participate in Open Bidding.

• This fee is deducted from the winning bid before the revenue reaches the publisher.

• Standard Fees:

  • 5% fee for display inventory (web).

  • 10% fee for app and video inventory.

Example:

• If an SSP (e.g., Magnite, Index Exchange) wins an impression with a $2.00 CPM bid, Google takes 5%.

• New payout from the SSP = $1.90 CPM ($2.00 - 5%).

  
  

📌 Important: Open Bidding fees apply only to bids from non-Google exchanges that win via Open Bidding.

2. Google Ad Exchange (AdX) Revenue Share (15-20%)

• If Google AdX wins an auction (instead of an SSP in Open Bidding), then Google applies its AdX revenue share.

• AdX Revenue Share (Estimates Based on Industry Reports):

  • Google typically takes 15-20% of publisher revenue.

  • Publishers receive 80-85% of the winning AdX bid.

Example:

• If AdX bids $2.00 CPM, and Google’s rev share is 15%, the publisher keeps:

  • $1.70 CPM ($2.00 - 15% Google share).

    
    

📌 Important: AdX revenue share applies only to AdX bids that win. Open Bidding fees apply to non-AdX exchanges that win.

Does Open Bidding + AdX Rev Share Stack Together?

• If an SSP (e.g., Xandr) wins via Open Bidding: Google only takes the 5% Open Bidding fee (no AdX rev share).

• If Google AdX wins: Google takes its normal AdX revenue share (15-20%) but NOT the Open Bidding fee.

• Google does NOT charge both Open Bidding fees AND AdX revenue share on the same impression.

Final Example: If a Publisher Has Open Bidding & AdX

Scenario	Winning Bid	Google Fee	Publisher Receives
Open Bidding (SSP Wins @ $2.00 CPM)	$2.00 CPM	5% Open Bidding Fee (-$0.10)	$1.90 CPM
AdX Wins @ $2.00 CPM	$2.00 CPM	15% AdX Rev Share (-$0.30)	$1.70 CPM

Open Bidding - Tl;dr

✔ Google takes either the Open Bidding fee (5-10%) OR the AdX revenue share (15-20%)—not both on the same impression.* 

✔ The Open Bidding fee applies only to third-party SSPs that win the auction. 

✔ The AdX revenue share applies only when Google AdX wins the auction. 

✔ If AdX bids lower than an SSP in Open Bidding, Google takes the Open Bidding fee instead of the AdX rev share.

Conclusion

If you are interested in Header Bidding and/or Open Bidding and don't know where to begin, contact us at Blueprint. We're here to guide you through your programmatic advertising journey.

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