Layer 7 load balancers look at the application layer to decide how to distribute requests. This can involve contents of the header, message, and cookies. Layer 7 load balancers terminate network traffic, reads the message, makes a load-balancing decision, then opens a connection to the selected server. For example, a layer 7 load balancer can direct video traffic to servers that host videos while directing more sensitive user billing traffic to security-hardened servers.
At the cost of flexibility, layer 4 load balancing requires less time and computing resources than Layer 7, although the performance impact can be minimal on modern commodity hardware.