What Is Dynamic Flooring?

The advent of programmatic advertising — particularly real-time bidding in the open marketplace — has long been disparaged by publishers as “The Race to the Bottom,” with advertisers forcing down CPMs by cherry-picking impressions.

But publishers are not without controls to keep the bottom at bay — flooring, the process of setting a minimum price for ad inventory, empowers publishers to keep inventory pricing competitive with other channels (e.g., direct sales).

Flooring is a simple concept: a publisher sets the minimum CPM they are willing to accept for an ad placement, and an advertiser must pay this amount or higher to display the ad. Publishers using Google Ad Manager (GAM) set their CPM floors for the open exchange using Unified Pricing Rules (UPRs), ensuring that any bids accepted from their programmatic demand partners meet their minimum pricing requirements.

This is where the simplicity ends and the anxiety begins. Set your floors too low, and you miss out on revenue from advertisers who are willing to pay more. Set them too high, and you miss out on fill.

Continuously establishing the right CPM floors to earn the highest revenue for your ad inventory without sacrificing fill rate is simply impossible to do manually. But it is possible to automate through dynamic flooring.

A Floor-Shifting Odyssey

The holy grail of yield management is that sweet spot that maximizes both CPMs and fill rate — but this sweet spot is a constant-moving target. CPM variations occur based on content, traffic source, seasonal spending trends, macroeconomic factors, user data, tech variables like device type, browser, operating system, and every combination of these CPM “ingredients.”

Some publishers dedicate hours, full days, and even team members to analyzing CPM data and updating UPRs. They spend a lot of time and effort on a process that results in low and untraceable success. Other publishers prefer to “set and forget” their UPRs. They may not be sacrificing time and mental sweat equity to maximize yield, but they are leaving money on the table by not passing optimal floors.

Even if you could manually set floors effectively, GAM limits the number of UPRs you can create. To achieve optimal CPMs, you’d want to pass custom floors at a granular level. Each page on your site earns differently, so you want a unique floor for every URL and all the other CPM variables.

Dynamic Flooring to the Rescue

Dynamic flooring is a way to intelligently and proactively adjust your floors based on real-time data from every pageview. With each impression, a dynamic flooring solution learns and improves its ability to create the right floor at the right time. It will automatically generate a real-time floor based on a smart prediction of the value of the current pageview.

Several variations of dynamic flooring have appeared over the years, and they are not all created equal. Many publishers have even grown wary of the term dynamic flooring as providers have not optimized revenue but instead, shuffled it among partners. This favors one or more demand partners to others’ detriment and fails to drive incremental revenue.

Ultimately, dynamic flooring is not about getting your UPRs right. The way to achieve the ideal flooring system is to control the win rate of your SSPs. Doing this will create pricing pressure on your whole revenue stack.

An ideal flooring system should:

  • Set an infinite number of granular floors based on page content, user data, traffic source, technical specs, and other variables;
  • Continually adjust floors based on the latest data (this might mean that floors are adjusted every few minutes);
  • Pass the optimal CPM floor for every ad placement on every pageview; and
  • Automate your flooring optimization.

When you implement smart publishing tech that accesses the latest, granular data from every pageview, it’s like having 50,000+ UPRs simultaneously working for you and automatically updating in real-time.

Finding the Right Solution

Dynamic flooring solutions are springing up faster than identity partners. Look under the hood, before you sign the vendor with the lowest price and biggest promises, Ask them these questions:

  • How does your technology create optimal floors for every pageview?
  • How recent is the data you’re using to set floors?
  • How can you prove that your solution makes me more money and isn’t just shuffling my revenue?

If they can’t show their work, work with someone who can!

Dynamic flooring is one of the best tools to earn more from the open exchange, which is especially important when strange economic circumstances stymie the flow of direct-sold campaigns. However, picking the right solution requires more than a price-tag check—be sure you’re prepared to tell the difference between revenue shuffling and true dynamic flooring.