One of the most common questions we receive from publishers is, “How do I increase my fill rate and CPM?” The answer to this question can not only be complex but also varies from publisher to publisher.
At Sovrn, we believe in partnering with publishers of all sizes. Therefore when answering this question we aim to scratch the surface as well as provide some best practices for optimizing performance overall!
Something to keep in mind is that Sovrn is an open advertising exchange, and we pay our publishers based on what the advertisers are paying for a publisher’s inventory. That means the more traffic your site brings in, or the more engaged your site’s audience is on your site, the higher an advertiser will be willing to pay.
About Floor Prices
When a user comes to your page, an ad call has been sent to the Sovrn exchange where we host a real-time auction. The advertisers Sovrn works with then send their bids for the inventory and the highest bid wins. The CPM and fill you see is entirely based on the bids that come in from the advertisers. Without a price floor in place, you can expect to see organic numbers for how the advertisers view your inventory.
When creating a new ad tag, we recommend not using a floor price. Leaving the price floor at $0.00 initially will allow you to gather some organic data on your CPM and fill. Let the tags run for three to five days with no floor in place to really see how demand values your inventory.
When you accumulate data on how the demand values your inventory, you can use price floors to help manipulate the CPM and fill you are receiving. With a price floor set, Sovrn will not accept any bids from advertisers that are coming in under the price floor you have in place. Therefore, having a price floor in place will increase your CPM, but could also lower your fill rate. In short, CPM and fill are inversely related.
Some Basic Math on Floor Prices
A general rule to follow when optimizing your tags is to find the best overall yield. In this case, yield = CPM x fill. For example, if you are seeing a $.50 CPM and 80% fill, your yield = .50 x .80, which is .40. If you were to increase your price floor in this example, and your CPM increased to $.60 and fill dropped to 75%, your yield is now .60 x .75, which is .45; resulting in an increase in performance.
As you continue to increase your price floor and check the performance change in Meridian, you will want to ensure that this yield increases. Since your price floor and fill are typically inversely related, eventually you will reach the point where the fill has decreased to the point where you are no longer increasing your yield. At this point, you will want to lower your floor back to where you found the “sweet spot” between when your yield was increasing and when it plateaued or began decreasing.
How Additional Partners Can Make Floor Prices Generate More Revenue
As you begin to add more partners to your programmatic ad stack, optimization can get a bit more tricky. While the yield = CPM x fill can be seen as a best practice for setups that have just one or two partners, as you build out your waterfall setup you will likely position your partners based more on the strengths of each specific partner.
For example, you may have a partner, we will call them partner A, that performs very well in the 300×250 ad size and you may want this partner to achieve a high CPM but a high fill. Knowing that you have another partner behind partner A in the ad stack, we will call this partner B, who can achieve higher fill but at a lower CPM, you would still be ok with partner A striving for a much higher CPM but not filling as many requests, knowing that partner B, or partner C, or partner D and so on, are still filling the requests that the partners ahead of them in the ad stack did not fill. The way you position partner A, B, C and D could very well be different depending on the ad size, placement on the page and what traffic sources send the most requests to that specific ad tag. The best way to determine which partner will perform best in specific placements is to test them in an A / B environment as the results will often be different for each publisher.
How Seasonality Can Affect Floor Prices
Don’t forget that the programmatic advertising industry as a whole is subject to seasonal trends. Don’t be afraid to raise floor prices around the holiday season (and don’t forget to change them back after Christmas!)
Typically, advertisers have yearly and quarterly budgets that they look to exhaust as the quarters and yearly progress. When a new quarter begins, you will want to lower your floors as the spend coming through the exchange takes a slight dip. As we get deeper into the quarter, you can then look to increase the floors to take advantage of the advertisers increasing their spend across the exchange as they deplete their quarterly budgets. The end of Q4 is typically when we see the strongest performance due to the year’s end and holiday season. Again, this is an industry trend and something that can be applied to all of your programmatic partners.
Floor price optimization may sound like a daunting task but rest assured the Sovrn team and Community are here to help! We are always available at firstname.lastname@example.org to provide support and help with your optimization best practices.