This post was most recently updated on February 9th, 2021
Dynamic Allocation is a flawless integration of Google’s display networks: AdX, AdSense, and AdMob into DoubleClick for Publishers (DFP), in order for publishers to increase their yield from all their inventories.
Dynamic allocation provides publishers a real-time competition for their impressions between Ad Exchange and all of the other demand partners set up interconnectedly inside their DFP. This competition not only helps in the publisher’s return on investment, but it will also mean that publishers are always working to increase their prices inside the Ad Exchange and raise the value of the inventory.
Read: Dynamic Allocation in DFP: A Step-by-Step Guide
Enhanced dynamic allocation, on the other hand, enables dynamic allocation to be open for standard-level and CPM based direct sales inventory. In other words, publishers’ guaranteed campaigns will also be competing with Ad Exchange in dynamic allocation driving the publisher’s direct campaign rates even higher.
Dynamic allocation only competes against non-guaranteed line items. This means that sponsored and standard line items are unaffected. Enhanced Dynamic Allocation, on the other hand, allows Ad Exchange to compete against standard priority items that have a fixed impression goal, but it will not do so if that line item is struggling to meet its impression goal.
Publishers can utilize this strategy in full certainty and in an automatic way without having to make major changes or worrying that guaranteed campaigns won’t deliver. Publishers don’t need to set the CPM rates for the standard inventory if they don’t currently do so since DFP will be the one to calculate the CPM rate based on the inventory’s worth.
Dynamic Allocation involves these elements:
1) Link Adsense or Ad Exchange to DFP through the Admin Tab.
Scroll to the bottom of your DFP Admin account settings and link your Adsense and Ad Exchange account from the 3rd Party Services portion.
2) Complete the linking at Ad Exchange Account Settings portion under 3rd party access.
3) Get a hold of your ad strategy. Create your campaigns, orders, and line items.
4) Setup Price Priority Line Items
Begin working on your price priority line items that are included in your strategy. This is where you put in ad sizes, impressions, and targeting (ex. Female users in the US only, etc.)
5) Real-time auction begins
Let Google do the rest of the magic through its real-time auction. The line item inventory you create in step 3 will automatically compete with Adsense and/or Ad Exchange accounts linked to your DFP.
6) Evaluate and Optimize regularly
Adjust your parameters over time based on your metrics. In keeping with dynamic practice, study reports of your inventory’s performance and make changes as you see fit.
With enhanced dynamic allocation, DFP considers standard line items and remnant line items that can serve to the impression. It then selects the best one according to the following criteria:
1) DFP creates a “temporary CPM,”
or reserve price, for eligible standard line items based on the line item’s priority, progress, and historical bid data to optimize publisher revenue. The lower a line item’s Satisfaction Index (SI) (that is, the more behind schedule it is), the higher the temporary CPM that’s passed to Ad Exchange. Therefore, a standard line item that is behind schedule will win often enough to stay on pace to satisfy its goal and pacing settings.
2) For eligible remnant line items, DFP picks the one with the highest CPM.
3) DFP sends the higher of the temporary CPM and CPM to Ad Exchange.
4) If an Ad Exchange ad can beat the CPM or temporary CPM, then that Ad Exchange ad serves; if not, the DFP or remnant line item serves.
Note that any Ad Exchange ad selected to serve will still adhere to the conditions of preferred deals or private auctions, if applicable.
Both mechanisms enable the publishers to get an increased yield because of the pressure it gives Ad Exchange to increase the CPM performance when it’s in competition with another network.
With traditional DA, the revenue potential is increased as Ad Exchange is striving to get higher CPM to compete with other demand partners linked to the DFP account. The enhanced dynamic allocation also increases the maximum revenue potential as different networks and demand partners compete with Ad Exchange for the publisher’s inventories. The higher the number of networks competing for the inventories, the tighter the competition leading to higher CPM rates and increased revenue.
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Kean Graham is the CEO and founder of MonetizeMore & a pioneer in the Adtech Industry. He is the resident expert in Ad Optimization, covering areas like Adsense Optimization,GAM Management, and third-party ad network partnerships. Kean believes in the supremacy of direct publisher deals and holistic optimization as keys to effective and consistent ad revenue increases.
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