Maximizing ad revenue: a checklist for publishers

Maximising ad revenues is part of every publisher’s DNA; their success and survival depend on it. But as advertising technology and the resulting supply chain have grown more convoluted, yield optimisation has become a harder discipline to pull off well.

Nonetheless, the publisher tool chest is not empty. Header bidding, which allows publishers to receive bids for their inventory from several buy-side partners at the same time (in contrast to inventory being passed to ad networks in sequence), allows for rigorous testing and ongoing optimisation. Likewise, ad server configuration, line item prioritisation, and data-driven price floors are additional proactive steps publishers can – and should – be exploring to increase their revenues.

1. Leverage header bidding to build a ‘test and optimise’ approach

A/B testing to see which creatives are the most effective at driving consumer engagement has been a demand-side staple almost since the advent of digital advertising.

Test-and-compare for sell-side yield optimization is far less common, but it is an option for publishers with header bidding set-up. For example, having too many demand partners plugged into a publisher’s header and competing for an ad impression at the same time can slow down the bidding process, and therefore the time it takes pages to load – risking a bad user experience, or having the user abandon the page before ads can be served. Fewer ads mean less revenue. This dynamic causes many publishers to restrict the number of demand partners they allow into their header to ensure pages load quickly.

Some publishers will also try to avoid slow page load speeds by stipulating a maximum length of time (the wrapper timeout) for ad buyers to submit a valid bid when inventory is available. If this is too short there may not be enough time to solicit the bids needed to monetize their inventory. If it is too long, they (again) risk a bad user experience.

While both of the above approaches are useful, the optimum mix of demand partners and the wrapper time-out value are unique to each publisher (and in some cases, unique to specific ad units). Testing what works best for their individual set-up is time well spent as it can increase revenue opportunities, without any major impact for the person viewing the website.

For example, more bidding partners may increase revenue opportunities without the user feeling they are waiting too long for a page to load. Conversely, cutting several demand partners from the header may have minimal impact on ad revenues, but dramatically increase page speed (which would be a reason to start culling). And, because it takes longer to scroll down to the lower part of the page, extended timeout rates for ad units below-the-fold could potentially reduce the risk of inventory going un-sold without impacting the viewer.

Once a testing strategy has been developed, there is no shortage of other factors to submit to the same rigor with ongoing A/B tests. While this might sound cumbersome, most of the major header bidding frameworks offer solutions that simplify and streamline a publisher’s ability to implement and measure the impact of these tests on various KPIs, including yield, fill rate, and eCPMs. And because the programmatic landscape changes all the time, the testing is never done.

2. Allow programmatic to compete with direct sold (when the CPMs are right)

Google Ad Manager (GAM) prioritizes the ad serving process; in simple terms, any direct-sold inventory will be assigned to a ‘Guaranteed’ priority level (denoted as ‘Sponsorship’ or ‘Standard’) and will always be served before any lower-level priority line items, even those with a higher CPM coming through channels like programmatic. Those header bidding line items are usually assigned to a ‘Non-guaranteed’ tier (typically denoted as ‘Price Priority’ in GAM), meaning they tend to compete in fewer auctions and achieve lower fill rates.

Publishers can achieve higher fill rates – and therefore yield – on inventory sold via header bidding by rethinking how they set line item priorities within GAM. A good approach is to identify the CPM threshold where the fill rate of header bidding line items stops growing proportionally to the price; this is the point at which to increase those programmatic line items with higher CPMs to a ‘Guaranteed’ priority level. Doing so will allow this inventory to compete with direct-sold campaigns, provided the floor price is high enough (addressed in the next section).

Changing the way line items are configured is often overlooked by publishers, but adjusting line item priorities is a straightforward way to boost fill rates and improve yield, especially during times of the year when media buyers are looking to spend their budgets, such as the holiday season.

3. Take a granular approach to setting price floors

Items offered in real-world auctions often have a reserve price set in advance to ensure they are not undersold. For example, in an art auction, if the seller sets the reserve price at $1,000 and if the highest bidder only comes in at $700, the artwork goes unsold. In this case, the seller is willing to NOT sell the painting – and forgo the potential earnings – if the bids don’t rise to the desired price. This indicates that the seller doesn’t need the money right away, or feels relatively confident that they can sell the artwork at a higher price at a different time or in a different setting.

Publishers have the same tool at their disposal in programmatic with price floors. Unlike art auctions, however, digital inventory that goes un-monetized because the price floor was not met can never be sold again, which equates to money being left on the table. But not setting floor prices risks undervaluing the inventory, which is why it’s critical for publishers to approach price floors with intention and intelligence.

Setting price floors requires a granular approach. It’s not sufficient to set a floor across the board, as the publisher will almost certainly lose out on revenue for inventory that can’t demand the same high bids they might want for their more premium inventory (above-the-fold versus below-the-fold placements for example).

Instead, publishers should be looking for specific pools of supply that are demanding higher bid rates or CPMs and figuring out the characteristics that make it more attractive to buyers. Once they have located the specific inventory that attracts unique demand, it’s time to start experimenting with floors.

Some obvious places all publishers should be paying attention to include: geography (typically US inventory demands higher CPMs than other regions); page position (above-the-fold compared to below-the-fold); video inventory type (in-stream or out-stream); and individual ad units. If a publisher does want to apply and test floor prices to any of the above inventory attributes, it’s critical that they also pass the relevant signals to buyers in the bidstream, so they can recognize those attributes and bid accordingly.

Price floors should also be transparently passed on to all buy-side partners to inform their own bid logic, although it can take some time for buyers to react. It’s useful to revisit price floors quarterly to make sure they still make sense. For example, a publisher might want to raise them slightly as holiday spending starts to take off in Q4.

Proactive strategies for optimum results

Publishers spend extensive time and budget creating content that appeals to the right audience, that will, in turn, be attractive to advertisers.

It makes good business sense therefore to match this investment with a proactive yield strategy that ensures their advertising technology is delivering optimum results. Testing and optimising header setups, allowing programmatic line items to compete with direct-sold, and implementing a data-driven price floor strategy, as outlined above, are just some of the tactics available; improving one element can make a significant contribution to revenue.

However, success is not static and the balance required to achieve maximum ad revenues will change over time. Publishers playing an active role in yield management will be able to use this to their advantage.

Alexandra Balashoyu

Head of publisher operations at IPONWEB’s MediaGrid

View the original at Whats New in Publishing

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