Setting price floors


#1

Anyone have any general tips or guidelines for best practices to setting price floors?

Generally I do a lot of trial and error, but I was just curious if anyone in the community had any advice or success stories to share. I don’t use header bidding at this time.


#2

Hi,

When first implementing a new ad tag, I recommend not using a price floor to start. Leaving the price floor at $0 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 see how Sovrn’s demand is valuing your inventory.

Once the tags have been live for a few days, you can begin to adjust your price floor to find the best overall yield. When implementing price floors, I recommend making slight adjustments of about $.10 at a time so as not to really hurt the fill you are seeing. I also recommend allowing the tags to run for about three days after each price floor change to see how the floor change is affecting performance.

You can filter performance for a specific date range in Meridian. To do so, go to the “Earnings” tab on the left-hand side. From there, select the drop-down box to the right of the “Last 30 Days” button and select “Custom Date Range”. Select the date range for which you have implemented the new price floor and you will see how the price floor affected the performance of the tags.

The overall goal when optimizing your tags is to find the best overall yield, with 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 .6 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 is increasing. 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 which point you will want to lower your floor. It all comes down to A/B testing, or as you mentioned, trial and error, when finding the best overall yield.

A few final things to keep in mind when optimizing; Sovrn is an open exchange and the CPMs and fill we see across our exchange vary. Performance is dependent on how our demand will value the inventory they are seeing on your page. Additionally, keep in mind that advertisers have yearly and quarterly budgets. 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 again 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. These trends are industry wide and can be viewed as a rule of thumb for any exchange you are using.

I hope this information helps you to continue optimizing your account with Sovrn or any other partners you are using.

Best,
Alex