Rob Beeler
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In preparation for a panel at the Prebid Summit on October 15, 2024, I asked our speakers to add notes to a prep document so I could direct my questions accordingly. When I reviewed their notes, I realized the document had more insights than I could ever bring out in a panel discussion. I’ve assembled some of their thoughts on publisher flooring strategies with their permission.
Our panelists:
- KiYonna Carr, Director, O&O Yield Management at Yahoo
- Phil Bohn, SVP, Sales and Revenue at Mediavine
- Scott Kolb, Co-Founder at Longitude
How Important is Flooring?
KiYonna highlighted that the importance of flooring varies based on several factors:
- Programmatic Revenue Share: The proportion of revenue derived from programmatic ads can dictate how much attention you pay to your flooring strategies.
- Seasonal/Market Changes: Some industries are more susceptible to fluctuations, requiring more dynamic floor strategies.
- Inventory Complexity: The more intricate your inventory, the more critical your flooring becomes.
In terms of value, she emphasized that flooring influences bidder behavior, especially in first-price auctions, resulting in a 10-15% improvement in yield.
Phil stressed the value of flooring, as it’s the key to effectively pricing your inventory. He pointed out that no one knows your inventory better than you do. Referencing a Jounce Media report, he argued that static floors hurt publishers, especially when some Supply-Side Platforms (SSPs) pass bids below the floors. In his experience, flooring often leads to 10-15% yield improvement and helps prevent CPM (cost per thousand impressions) decline.
Scott took it a step further, calling flooring “extremely important.” He mentioned that enabling floors can lead to a 10% RPM (revenue per thousand impressions) lift on day one, with some publishers experiencing up to a 40% RPM increase over a few weeks. In year-over-year comparisons, some sites saw as much as a 76% RPM lift. Flooring, he argued, helps filter out low-value bids, which results in higher-quality bids, better win rates, and ultimately more revenue.
What are some Flooring best practices?
KiYonna recommended:
- Leverage Dynamic Flooring: Adapting floors based on real-time data and market conditions.
- Be Transparent and Fair: Ensuring partners understand your pricing.
- Adopting a Holistic Flooring Strategy: Consider all aspects of inventory in your plans.
- Analyze All Bids, Not Just Winning Bids: This provides a fuller picture of how flooring impacts auction dynamics.
Phil suggested:
- Kick Out Bids Below Your Floors: Although some SSPs may initially decline, they eventually rise, allowing you to capture more revenue.
- Analyze As Many Bids As You Can: This data helps optimize inventory pricing.
- Avoid Low CPM: Bids below $1 aren’t worth the trouble.
Scott emphasized the importance of continually updating floors to keep up with market trends:
- Segment Your Floors: Adapt floors by ad unit, geography, device type, browser, and refresh depth.
- Enable Bid Caching: Implement Prebid’s bid caching with minimal effort for a quick revenue boost.
- From Prebid’s Bid Cache pool, use the highest bid value left in that bid pool as the floor value for your refresh auction.
One key challenge in flooring strategies is understanding how Demand-Side Platforms (DSPs) and SSPs react to floors.
Scott pointed out that while publishers don’t have direct visibility into DSPs’ reactions, SSPs react quickly to flooring adjustments. Their response can significantly impact auction dynamics, leading to better bid quality and more revenue. SSPs need to win to bid. By setting more appropriate floors, you’ll eliminate a lot of low-value bids that have no chance of delivering, thus increasing the chances that when an SSP bids, they win. Higher win rates will relax their traffic shaping of your inventory, leading to more of your bid requests being forwarded to DSPs.
How Do You Test Your Flooring Strategy?
Regarding testing flooring strategies, opinions amongst the panelists differ slightly. Rather than A/B testing, which ongoing auctions can influence, Scott suggested a more dramatic approach: turning off floors entirely for a 24-hour period to assess the impact. When floors are turned off, they observe:
- Win rates drop
- Bid rates increase
- RPM declines by 8-10%.
Our expert panel made it clear in their notes and on stage that flooring is crucial for publishers looking to maximize their programmatic ad revenue. Effective flooring strategies are necessary to drive up CPMs, improve win rates, or prevent revenue erosion. By analyzing bid behavior, being transparent with partners, and keeping floors dynamic and adaptive, publishers can stay ahead of market shifts and continue to grow their RPM.
Implementing the right flooring strategies – dynamic adjustments, segmentation, and continual testing – can lead to significant revenue lifts and help publishers maximize their ad inventory.