Flooring Best Practices Drive 107% Revenue Lift
Google launched Unified Pricing Rules (UPRs) in early 2020 as an alternative to RTB Price Floors, allowing publishers to manage their floor prices across all of their programmatic demand within Google Ad Manager (GAM). Since then, Magnite has been working with a number of publishers to remove their exchange price floors and allow UPRs to enforce floors to save them time and help drive revenue lift.
What are Unified Pricing Rules?
Unified Pricing Rules allow publishers to centralize the management of target CPMs or floor prices in GAM across all of their programmatic demand. As a result, UPRs remove the need for publishers to manage floors in multiple UIs and enable more dynamic flooring to eliminate the possibility of RTB Rule Floors unnecessarily blocking revenue.
Floor prices within the exchange have traditionally been set as the lowest CPM price a bid will need to meet for each auction – a way for publishers to signal to bidders the price to beat, thereby protecting the value of their inventory. However, such traditional floor pricing methods used in conjunction with UPRs can also throttle demand and result in lost revenue through unsold impressions, which is why Magnite recommends updating exchange floors to $0.01 and utilizing UPRs where possible.
UPRs drive performance uplift
Using UPRs as the sole means of flooring is not only a more efficient means of managing floors, but it also removes the potential for discrepancies between the prices set within the exchange and the true floors set within GAM. Magnite tests have shown that by embracing UPRs and removing the exchange floors, publishers can save time and help maximize their revenues.
Magnite recently worked with a premium news publisher to test ways in which they could improve their video ad revenues by replacing exchange floor rules with UPRs. By comparing the 14-day period prior to removing price floors with a 14-day period following the replacement of price floors with Unified Pricing Rules (UPRs), the publisher was able to see significant results.
- Higher demand for impressions. Price floors can often throttle demand for impressions that would otherwise go unsold, and thereby result in missing out on additional revenues. By removing floors within the exchange and allowing all demand to be sent through to GAM, the premium news publisher was able to achieve a 387% increase in ad responses.
- More competitive auctions. By increasing demand and making auctions more competitive, the publisher was able to drive a 146% increase in paid impressions. This was likely due to a discrepancy between the floor settings in the exchange and the true floors set in GAM.
- Increase in rCPMs. With more requests being filled there was a 100% increase in ad request CPM.
- Revenue lift. By selling more impressions there was a 107% increase in gross revenue indicating the impact of selling impressions at market rates.
UPRs are for all publishers
Magnite has worked with a number of publishers to remove exchange floors in favor of managing floors through UPRs in GAM. The net result has been impressive when exchange demand is no longer constrained by the impact that RTB Floor Prices can sometimes put on ad responses.
For any publisher using GAM’s UPRs for flooring their inventory, we highly recommend they update their RTB Rule Floors accordingly to help maximize revenue and save time:
- For inventory rules publishers should pause any RTB Rule Floors that have inventory targeting type and set a default RTB rule to $0.01 to enable your SSP to respond with all possible demand and allow GAM to handle inventory flooring. This prevents publishers from having to manage these floors in multiple UIs – saving them time and avoiding missed revenue opportunities with floors sometimes set too high – as well as increasing ad responses and helping to maximize revenue.
- For demand rules we recommend publishers mirror any UPRs (this doesn’t apply to Target CPMs) that are set by advertiser, brand, or size with RTB Rule Floors to prevent your SSP responding with demand that has no chance of winning when we might have other demand that could win.