There are a lot of publishers who rely on Google Ad Exchange as their sole stream of revenue. This is mainly because it has global fill rates and is able to monetize every geography at good rates. However, depending upon your inventory type, there may be additional monetization opportunities and in this article we are going to discuss how publishers can use price floor optimization technology companies to further increase their Google ADX revenue. Here are will take about why Google ADX price floor optimization can increase your ad revenue, understand first price and second price auctions and we will suggest you the best price floor optimization partners to get you started.
What is Google ADX Price Floor Optimization?
In a real time bidding environment, major transactions take place in CPM basis where buyers bid on your ad spaces at specific rates. The same buyer may be bidding at your ad space through different DSPs and Exchanges. These bids essentially vary and depends on factors like advertiser’s competitors who are bidding on the same ad space. Higher the competition, higher should be the bid so that the winning impression is credited to the buyer. In a first price auction mechanics they buyer has to pay the actual amount which he or she is bidding on the impression if the impression is won by him. So, if there are 3 advertisers who are bidding at $1.44. $1.23, and $2.1 for a particular impression, the one who made the bid of $2.1 actually wins the auction and pays the publisher the rate of $2.1 (obviously after the network cut). This is defined as first price auction where the advertiser or the marketer ends up paying what he or she has actually bid on the impression. However, this might result in bit higher price variation as the buyers have limited knowledge of the quality of the impression and other first hand information which makes it possible for them to predict the exact worth of every impression
Second price auction is declared by many exchanges like Google ADX and others to protect the interest of the buyers and give them the flexibility of bidding at rates they truly believe but at the same time doing a justice to their advertising spend. In a second price auction environment, the buyer will pay 1 cent more than the second highest bid price which is auctioned and not his or her actual bid. Assume a case where 4 advertisers have bid for the same impression which and their bids are $1.5, $2.2, $3.17 and $1.88. Here, the buyer who wins the auction has made a bid of $3.17, however, the second highest bid is $2.2. So, essentially, if the buyer had made a bid of $2.21, he would have won the auction at that price and would have made a saving of 96 cents. Ideally, this is what happens in a second price auction where the buyer actually ends up paying $2.21 and not $3.17.
So, essentially setting up price floor can change the second price auction into a first price auction. Since Google ADX runs on a second price auction mechanism, this opens opportunities for publishers to setup pricing rules against their inventory to filter low paying impressions and also ensure higher rates for every impression. When a publisher sets price floor, they the advertiser is bound to pay that minimum price and thus second prices auctions change to first price where the advertiser actually ends up paying the exact price which he made the bid. Now that you know how and why price floor optimization works, let us take a look at the best price floor optimization partners that can increase your overall revenue.
Best Price Floor Optimization Partners to Increase your ADX Revenue
More technologies are coming up to assist publishers in revenue uplift. Once such is AI driven price floors that pushes Google ADX to pay more for every inventory they are willing to take. These technologies are found to be most useful in situations where AdX was just being allowed to take every impression unchallenged. Less so when you had competing sources, as the competition increases (due to header bidding etc). It also works in a scenario where the majority of your imps are in an environment where it’s hard to get other competitors (native, inapp, etc) to push adx for imps or maybe specific geographies where Google ADX has the largest volume of advertisers for your inventory. On a number of cases, publishers have to depend on Google ADX for maximum impression intake where these optimizations make sense. So let us take a look at some of the best price floor optimization companies to get started.
Adomik is the data engine that makes monetization easy for publishers. “With Adomik’s automated pricing, we know our Open RTB inventory is priced fairly to ensure our buyers are happy and we are not leaving money on the table. By using Adomik’s machine learning to automate pricing and rule writing, more time is allotted for the team to focus on more strategic work.” Additionally, Adomik also collects your data from all your monetization partners, consolidate it, enrich it and make it available in a single UI. Based on machine learning algorithms and predictions of buy-side spending, Adomix generates the best floor prices for open auction and rate card for programmatic direct, and continuously optimizes your yield over time. Some of Adomix’s price floor optimization features include–
- Intelligent dynamic floor price optimization based on market fluctuations
- Fully transparent incremental revenue uplift reporting
- Granular pricing rule targeting: placement, location, time of day, buyer, etc…
- Stay mindful of price aggressiveness with floor price monitoring
- Pricing engine for PMPs
Roxot Revenue Lift automatically manages your inventory pricing in Google AdX. Their system analyzes each AdX impression and the performance of pricing strategies and identifies the optimal pricing for your inventory. Roxot is a partner of Freebid in this area. They are A centralized analytics and reporting platform for your ad stack: direct campaigns, AdX, AdSense, header bidding partners, native advertising platforms, etc. The tool provides you with unified statistics that are easy to compare and understand. They use transparent ways of optimizing auction mechanics so that impression prices reflect the real demand for your inventory. Our data-driven technology utilizes historical data to automatically price each impression. Dynamic price floors are sent to our demand partners as a hard floor in an initial ad request. Bids are sent directly to the header after we receive them. Thanks to header bidding, you no longer risk your revenue; if our demand partners’ bids are below the floor, the impression will be filled by another adapter.
- Knowing the optimal price floor for ad auction is a lot easier when Roxot does the work for you. Our algorithm processes the data from every website our code is used on. We do the research and the legwork
- Only using collected data to maximize revenue for the publishers community and to protect their market position, the data is never used for other commercial purposes; sold to or shared with any third party.
- We provide you with actionable insights into what’s getting the most revenue, which visitors you need to attract, what ad placements and sizes to use, and more.
Advelvet provides AI based ad revenue maximization for Google Ad Manager (AdX) publishers. Our system learns and sets prices in a fluctuating exchange world where constant human intervention is impossible. They set the price floor by analyzing, learning and setting different floor prices for your Google Ad Manager (AdX). Advelvet’s platform boosts revenues more than 70%. Advertisers already use advanced and automated technologies to get the best prices to show their ads on your page. Now there is a way to fight back, where you get your own AI based automation. The publishers only select which ad units to optimize and just sit back. Advelvet connects to your Doubleclick Ad Exchange, gets your reports and starts analyzing and setting optimum floor prices for different segments. This is a continuous process and is fully automated. You always have the option to stop or start any ad unit of your choosing. Advelvet optimizes your AdX so your revenue gets the boost.
- Analyzing past percentages and setting the right price floor so that the publishers earns way more than they normally would.
Benefits of Price Floor Optimization for Publishers
Price floor optimization can increase your overall ad revenue. However, it is impossible to constantly manage the price floors across your inventory for maximum results. These ad technology companies use AI and price prediction algorithms to accurate set the price floors for your impressions to ensure you get a higher revenue uplift across your inventory. Do keep in mind that your ADX revenue should be at least around $10,000 month so that a substantial revenue uplift can be realized with the use of such technologies.
The Future Opportunities for Price Floor Optimization
There are a lot of exchanges and platforms which have moved to first price auction which makes more sense in an open market. However, Google with its dominance in advertising industry with products like Doubleclick and Ad Exchange can still continue to move with second price auction because of the perfect integration of these technologies. Publishers using price floors have seen an increase in revenue in the percentage of 12-30% from ADX alone. This is in fact significant since you’re only bringing in one ad technology to your stack and generating the uplift from Google ADX only. Along with header bidding, price floor optimization will continue to grow in parallel since the marketers don’t really intersect and it is not possible to compare both. In fact, publishers can implement both, header bidding and price floor optimization in further increase their ad revenue.