Let’s go back to basics, what are floor prices ?
As RTB allows your customers to come and buy your advertising inventory through a self-serve open auction mechanism, the system of floor price allows you to set a minimum demand price in the bid request you send your buyers.
If the buyer fails to bid above your floor price, his participation won’t even count into your auction.
Floor prices can be set-up at two levels :
- In Prebid Wrapper Module : you can set up your floors network-wide in a single instance, however it requires some developments. You will be limited in terms of dimensions granularity.
- Directly in the SSP : You will have more granularity available, with the possibility to create rules at the Demand level and set a specific price regarding the DSP, the Buyer, the advertiser, the advertiser category, etc…
This can be a tedious process as you need to repeat the process as much time as you have SSPs. It might happen that your partner or SSP doesn’t make this feature available to you, as it is taken care by your account manager.
Therefore, we would recommend taking advantage of each method’s strength :
→ In Prebid : Set up a network-wide floor price at wrapper-level (publisher, size, media type).
→ In SSPs : Create more granularity within each SSP (AdQuality safety, Yield Pricing strategy based on performances, etc).
Why does floor prices matter ?
It matters as floor prices serve to establish a solid foundation to your programmatic monetization strategy that you want to implement on your inventory.
It’s a tool for you to defines its base value, on which you also build the pricing in order for your Sales team to have a coherent ratecard.
As more and more agencies turn towards establishing Deals and PMPs for priority access to high quality publisher inventory, how would you be able to convince media traders to run deals with you if they already can buy your inventory at a low price ?
Know your worth !
At last, it can even serve as protection or as we like to call it, “the first adquality filter”. By filtering out low CPMs advertisers with usually bad quality creative ads, you will avoid displaying a creative ad that wouldn’t look good next to your premium content. It’s an effective way regarding this matter.
Many ratecard strategy can be considered : Why would you make Programmatic Guaranteed more expansive than Preferred Deals since it guarantees you volume and revenue ? Strategies really depend on your inventory (rare and performant format) and objectives (maximize revenue no matter the RPM, etc).
But ratecard strategy is another matter that deserves a whole new study.
How should you identify the right Floor Price strategy ?
The goal for you is to identify which part of your inventory generates more value to your customers than others :
- Environment : desktop web, mobile web, Inapp, Google AMP,
- Formats : creative size, media type,
- Country Audience : Europe, North-America, MENA, etc…
- GDPR User Consent : yes or no ?
All those dimensions may have an impact on demand-side KPIs looked for by Media Traders for example :
- Viewability, which vastly depend on the layout out the website and how you integrated your format, if you refresh or stick your ad slots, etc…
- View-Through Rate : if you set up your players as click-to-play, unskippable ads or not ,
- Click-Through Rate : if the advertiser category is relevant regarding to your content ?
Which you should put in perspective to your supply-side KPIs Fill rate : is this ad inventory sought after by programmatic buyers ? Once you put these elements together you should be able to weigh-in on a floor pricing of your inventory which you should A/B test !
How can you monitor and optimize your floor prices ?
With the multiplication of demand entry points through the integration of many partners into publisher’s programmatic set-up, it became more and more difficult to monitor effectively if their floor prices strategy is coherent throughout all.
Manadge can help you this issue with the Alerts feature, where you would recreate the granularity of the floor price in place :
Let’s say you priced a floor price at 0.30€ CPM for the 300×600 Format on Desktop for French audiences across all your SSPs.
With this Alert, you would receive automatically receive a notification each time an advertiser still manages to buy this type of inventory despite your floor price :
You would be able to cross-check these advertisers in your Dashboards with other dimensions to identify and spot the issue : on which SSPs did it happen ? Which specific Publisher and AdUnit ?
And then take the proper measures to make sure it won’t happen again !