Ad Yield Ops 104: A New Approach to Price Floor Rules

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Now, we are going to introduce the building blocks for a new way to look at price floor rules, that has proven to simplify the strategy of setting them, and maximize revenue.

All too often, publishers look at price floor rules as individual items, single rules added on an ad hoc basis. Approaching your strategy like this can leave your rules disjointed and your ad revenue suffering.

Instead, we suggest publishers build a comprehensive price flooring strategy that combines different targeting criteria to create a set of rules that govern the strategy of your price floors in concert.

Similar to calling plays in sports, you don’t have each player on the team following a different strategy. The whole team knows the play, and each player is meant to take part in a larger strategy, effectively making the play much stronger.

Your target CPM and price floor strategy should be no different. Now let us show you how to do it!

There are tons of different targeting criteria you can use to build price rules. So many, in fact, it becomes very overwhelming very quickly.

Our ad yield management team has spent years tinkering with price floor strategies, running tests, and generally becoming the leading experts in what works. We’ve tapped them to put together a list of “starter” best practices when it comes to choosing targeting criteria for your price floor rules.

To begin, we recommend setting separate pricing parameters for each of your ad units.

Each different kind of ad unit you offer will have its own intrinsic value. Units that have higher viewability and engagement will be worth more. So the first step in setting your custom price floor strategy is to set unique floor prices for each ad unit you have.

Larger ad units, or those with higher viewability, can typically command higher price floors than smaller display units. Sticky or adhesive ad units that maximize viewability should also have higher price floors than traditional display units. Interactive units and video units should have significantly higher price floors than display units.

Ultimately, looking at your past CPM performance and average CPMs for your individual ad units should make it pretty clear how your base prices should be set in relation to each other.

Next, we’ll discuss important targeting parameters.

To get started, our team recommends focusing on making custom rules for the targeting criteria that create the most variance CPMs.

These criteria include:

Device Type: The type of device a user is on will have a factor in determining how valuable the impression is. Typically on mobile devices and tablets, inventory is simply not as valuable as that on desktop.

Country: The country where you are serving your ads will also have a major effect on the CPM you are capable of earning when serving impressions. Breaking up countries by standard tiers is a good starting point.

Browser: The browser a user is using to visit your website can also affect your ultimate CPMs. Because Firefox and Safari don’t collect cookies, visits are typically less valuable than those from Chrome users. 

Day of Week: Different days of the week tend to perform better than others for average CPMs. Typically, we find across our network that Fridays and weekends perform better than other days of the week, but this may be different for your site.

Hour of Day: You can even go so far as to make specific price floor rules for time of day. In general we’ve found that CPMs tend to be higher in the middle of night, spike in the morning, and go down in the afternoon.

Google Ad Manager does have quite a bit more targeting options available, but we’d recommend starting with these groups to begin with.