I Only Run Ad Exchange. Do I Need Unified Pricing Rules?

I Only Run Ad Exchange. Do I Need Unified Pricing Rules?

There could be many reasons behind the use of Unified Pricing Rules (UPR). Some publishers use it to exclude cheap paying ads which are usually causing redirects or popups on the site, or to simply push the bids up. Setting up a target CPM or floor CPM sends a message to advertisers on how valuable your inventory is – but there is a downside to it, when not properly done.

UPRs could make or break your overall monetization strategy. It takes careful planning and execution to ensure that you maximize the benefits. If you are only running Ad Exchange and nothing else, to monetize your ad inventory, assess whether it’s right for you or not.

Preparation:

  1. Start from square one – meaning, no UPR at all. This would allow you to assess how your inventory performs.
  2. Run a report on Bid Ranges
  3. Break down the report further by device category and by country. This may serve as your baseline.

Pricing Structure and Rules Priority

UPRs are not prioritized, and their order is not important. The pricing rule that’s chosen in a given ad request is solely based on targeting.

  • If two UPRs target overlapping inventory, the one with the higher floor price applies.
  • Use “broad to narrow” targeting approach.
    • Lower floors for pricing rules that apply to a broader audience (e.g. Run of network)
    • Set higher floors as you narrow down, targeting to segment your inventory. For example, by country, size, and ad unit.
  • The floor price defaults to zero if no UPRs match the targeting.

First versus Second-Price Auction

The bidder pays the second-highest price in a second-price auction. In this case, the floor price may increase the closing price of the auction.

In a first-price auction, buyers pay what they bid, so the floor price is of no use in closing the gap between the highest bid and the second bid.

Google has now transitioned to first-price auction.

Things to Consider When Setting up Unified Pricing Rules

  1. Setting floors too high can result in revenue loss as bidders drop out of the auction. The volume of unfilled ad impressions could potentially spike.
  2. Report on Optimization Type will provide insights on the uplift brought by target CPM in UPRs.
  3. Test with Hard floors vs Target CPM. Google is recommending the use of Target CPM but tests on some publishers have proven otherwise. For some, Hard floors worked better and increased their overall revenues.

The Bottom line

Running Ad Exchange alone doesn’t mean you can’t implement UPRs. Although this setup is a lot more fragile compared to having multiple demand sources in competition, it might be worth testing it out – with extreme caution.

Start conservatively and slowly (e.g. 1 to 2 ad units, 1 to 2 countries initially), then monitor the impact on overall performance.

Don’t let your impressions go to waste. Set up a passback or House line item to minimize unfilled impressions. Remember not to use Google demand as House though as it’s considered a policy violation. You can opt to use a 100% fill third-party Ad Network or use your own image creative and link to other sections of the site to increase pageviews.

Partner with MonetizeMore if you’d like to explore competing multiple demand sources to increase your ad revenues.

Learn more advanced ad optimization strategies at PubGuru University.

Kean Graham

CEO and Founder at MonetizeMore

Kean is the resident expert in Ad Optimization covering areas like AdSense Optimization, DFP 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.

Get our latest ad optimization tips delivered to your inbox

Fill out my online form.

Submit a Comment

Your email address will not be published. Required fields are marked *