This post was most recently updated on August 13th, 2020
Google is responsible for one of the most important innovations in the ad tech industry: dynamic allocation. Dynamic allocation enables the allocation of each ad impression based on RPM price within an ad server [Read: Step by Step Guide on Dynamic Allocation in DFP].
Since Google owns both Doubleclick AdX and DFP, they are able to connect the two so that DFP is able to predict the price that AdX will pay for each ad impression. This is powerful because AdX only shows when it is the highest paying bidder.
For the top 5% most sophisticated publishers, when setting up an optimal remnant inventory by running all other ad networks at price priority in DFP, the optimal allocation starts to break down. When setting up value CPMs, it is only a guess of what that ad network will pay in the next ad impressions. Even if the publisher is able to update the value CPM of every third party line item on a daily basis, it’s based on old stats.
Most publishers do not incorporate real RPMs by including the passback performance in the real RPM calculation. Such a setup would require a complex passback setup and a huge amount of hours every day to do thoroughly and accurately.
Finally, there is a solution to drastically decrease the amount of tedious ad optimization hours and to use current bid info rather than rely on old stats. Header bidding is dynamic allocation for third-party ad networks. Every bid that comes from a typical header bid network is actually what they pay. Instead of getting dynamic allocation from just AdX, header bidding enables dynamic allocation for all header bid networks. So if you’re only running AdX versus price priority header bid networks, you know that every ad impression is earning the max RPM within all the demand being served.
That is why header bidding is so optimal and has been the next biggest innovation. What does this mean for publishers?
Learn more about it over here: https://www.monetizemore.com/blog/header-bidding-a-to-z-publisher-guide
All the above factors equal higher ad revenues with the same amount of traffic and ads per page, simpler ad operations, and accurate stats segmented however you want.
If you’d like to take advantage of dynamic allocation outside Google demand, please sign up to MonetizeMore Demand [currently in beta].
Here’s the course that 300+ pubs used to scale their ad revenue.