You’ve probably heard about price floors before. Since Google Ad Manager switched to the first-price auction model, there seems to be more conversation about price floor optimization. Price floors and the use of Google’s Unified Pricing Rules have become an important component publishers can use for ad monetization strategy and at Freestar, our dynamic flooring product is offered for web display and AMP.

In the first-price auction, demand partners try to optimize their budgets to get impressions at the lowest possible price. For publishers looking to make sure they’re getting a fair value for their inventory, they can achieve this through careful price floor management.

Before we dive into Freestar’s price flooring technology, let’s start with the basics.

What is a Price Floor?

A price floor is an enforced value you set on your inventory so that buyers cannot pay below that amount. It’s a fixed CPM price that acts as a threshold from which only bids higher than the threshold are permitted to participate in the auction. In other words, a price floor prevents demand partners from buying ad impressions at prices below a certain amount set by a publisher or your ad ops solution like Freestar.

If publishers don’t use price floors, the ad inventory’s value can easily fluctuate and decrease over time. Buyers might use a tactic called bid shading to purchase ad impressions at the lowest possible price. A price floor may also be useful in helping prevent low-quality ads from appearing on the publisher’s site which can also affect user experience.

Types of Price Floors

With Google’s shift to first-price auctions, they introduced a new pricing feature — the Unified Pricing Rule. Its goal is to set a common pricing rule to Ad Exchange, Exchange Bidding, Network, Bulk, and Price Priority line items. Simply put, all the indirect demand will have the same pricing rules, hence the name “unified pricing.”

In Google Ad Manager, publishers have access to three types of price floors:

• Set floor prices (fixed CPM): Lowest winning bid must be no less than the floor price.
• Set target CPMs (default): Target CPM dynamically adjusts the floor price on matching inventory to maximize yield.
• Let Google optimize floor prices (Beta) : If you selected Set pricing for everything above, you can leverage Google’s machine learning expertise to automatically set floor prices per-query that maximize yield while protecting long-term inventory value.

Each type of price floor would ideally align with your overall strategy. For example, maybe you want to take a hands-off approach and let Google dynamically set the floor prices for you. It’s best to work with your ad monetization solution to see what the best strategy is to reach your goals.

How Floor Pricing Is Determined

Setting floor prices isn’t easily done. They’re determined by a number of factors and in order to set effective floors, publishers first need to understand what makes their inventory valuable. The different data points to factor in are:

• Device Type – What device are your users logging in?
• Type of Ad Unit – Which ad units are top-performing on your website?
• Geo – Where is your audience coming from?
• Date/Time – How do your ad units perform based on days of the week and time of day?
• Content – As a publisher, what is it about the content you create that engages users and provides value to brands that are looking to advertise alongside it?
• Bid Behaviour – Can you use bid-level data from exchange partners to understand historical market price?

First-party data is going to be even more important with third-party cookies increasingly under scrutiny and falling within privacy restrictions at the browser level (like those already implemented within Safari and Chrome). If publishers can’t determine the value of their audiences, they can be sure the walled gardens of ad giants like Google, Facebook, and Amazon will.

A good ad monetization solution will give you a floor price strategy to implement. A better ad monetization solution will work closely to analyze your data points, test different floor pricing strategies and build innovative solutions to make your price floors more efficient and effective for your business. That’s exactly what Freestar does.

Freestar’s Dynamic Flooring Technology

The goal of implementing price floors is to drive up the revenue generated by each ad request. At Freestar, our flooring technology utilizes artificial intelligence and machine learning to calculate the best performing floor price by website, ad-unit, geo, device type, day and hour for each impression delivered to maximize the ad request eCPM. We developed our dynamic flooring technology to help publishers more intelligently set floors in a first-price, header bidding world.

We believe price floors should increase publisher revenue without impacting the buyer’s incentive to bid and buy. As with any flooring strategy, when a price floor is set too high, buyers are often discouraged from purchasing that inventory and publishers may lose revenue. When a price floor is too low, buyers may feel free to bid close to the price floor so publishers potentially receive less revenue for their inventory than its potential value. Our flooring technology adapts dynamically to reflect inventory market value and is designed to evaluate and determine fair market prices and that include seasonality.

We worked with one of our publishers to implement our dynamic flooring and through using our technology, the publisher was able to increase eCPMs by 46.5% in just one day. Since the day our floors were activated, their average eCPMs now sits around $0.96. There’s nothing more powerful than using artificial intelligence and machine learning because no yield manager has the time or bandwidth to manually calculate your price floor strategy.

Freestar has a dedicated team of data scientists to analyze and monitor all the data points. Our dynamic flooring has been tried and tested on all types of inventory and it understands known and unknown inventory. The AI is smart enough to be able to predict the floor prices for new inventory it’s never seen before, based on all the inventory it’s seen in the past.

In Conclusion

At Freestar, we’re big fans of changes that help clean up and shape up an overly-complicated industry, but we also understand that publishers can often get stuck dealing with the impact of sweeping industry-wide changes, especially when they threaten their bottom line. That’s why we want to help provide publishers with the tools and technology they need to maximize revenue.

We developed our dynamic flooring technology in response to our publishers’ needs and concerns. From the results we’ve seen, it has only helped our publishers improve their bottom line. If you’re curious about our flooring technology and want to learn how we can improve your ad monetization, book a call with us today and our team would be happy to walk you through how we can help you and your business.

The post Price Floors and Freestar’s Dynamic Flooring Technology first appeared on Freestar.

Moving back to the subject of AMP, I’m keen to dispel some myths and comments that I hear daily once and for all. I write “once and for all” like the myths will magically disappear after writing this, but sadly they won’t. My real reason to put pen to digital paper is to help spread the knowledge within the industry, as it seems like the haters write more than the lovers.

So what are the myths I hear all the time?

– Isn’t AMP owned by Google?
– Google is killing AMP off
– Advertising revenues are lower on AMP than Mobile Web
– Core Web Vitals changes don’t favor AMP anymore
– Speed of a mobile web can be faster, so why use AMP?

Before I jump in and give you my opinion on this subject, let me tell you why you should hear me out.

– 17 years in digital publishing and advertising
– 2 times IAB council chairman. (IASH and Audio councils)
– Previous board member of Prebid
– Trained software engineer

I personally believe you should never take any advice/knowledge from someone that isn’t qualified to give it. I read plenty of articles on AMP and why it’s dying or isn’t relevant and 99% of the time they are written by folks that only say this because they are Google haters or just simply would benefit from AMP not being a thing.

So here’s my confession —

– I run a digital advertising business called Triple13 (recently acquired by Freestar) which specializes in creating revenues from AMP content.
– Triple13 is a Google Advertising Partner.
– I personally think that AMP HTML is the best choice for most publishers to ensure their content is optimized for mobile users.

Onto the myths…

1. Isn’t AMP owned by Google?

AMP (originally an acronym for Accelerated Mobile Pages) is an open source HTML framework developed by the AMP Open Source Project. It was originally created by Google as a competitor to Facebook Instant Articles and Apple News. AMP is optimized for mobile web browsing and intended to help webpages load faster.AMP pages may be cached by a CDN, such as Microsoft Bing or Cloudflare’s AMP caches, which allows pages to be served more quickly.

AMP was first announced on October 7, 2015. After a technical preview period, AMP pages began appearing in Google mobile search results in February 2016. AMP has been criticized for potentially giving further control over the web to Google and other concerns. The AMP Project announced it would move to an open governance model on September 18, 2018

Wikipedia

The key point here is that Google did start the project, but it’s 100% open source and Google doesn’t own it. If you interrogate the exact developers working on the project in Github, you will see there is still a good volume of work being done by Google employees. It’s definitely a community project which has a large range of companies/individual’s actively involved.

2. Isn’t Google killing AMP off?

I believe the critical answer here is that it’s not Googles to kill off, with that said they could simply stop AMP showing up in search results and that would kill it by default. The next question here is why would they ever do that? I have personally sat in numerous Google events virtually and also in their Dublin offices and there is a very constant theme, user experience and speed. There are loads of studies showing user bounce rates on slow mobile pages and without cannibalising other information in this post, AMP generally is the best and fastest option for most publishers to adopt enabling them to have a great user experience.

3. Advertising revenues are lower on AMP than Mobile Web

If I was going to be on Mastermind this would very likely be my specialist subject. Without a doubt, revenues from AMP content can definitely beat mobile web content page for page. The main issue here is that virtually every publisher I speak to don’t have the correct knowledge to make this a reality. More broadly speaking the level of AMP advertising knowledge in the industry is extremely low or more like nonexistent. If you do know what you are doing you can create the perfect storm, the fastest user-friendly content and also the best revenues. I’m missing out on a small but critical factor here… advertising campaigns perform extremely well in AMP, again when the advertising placements are set up correctly.

Most publishers code that I inspect generally are running with stock Google AdManager (still named doubleclick in the world of AMP) setup and this will only yield mediocre results. I would suggest any publisher wanting to optimize their AMP setup need to focus on these three key areas.

– The configuration on the AMP-AD code on the page. There are loads of tweaks and areas for optimization here, but I will save that for my next posts.
– The right demand mix. Each AMP-AD on the page has the option to add extra technology into the stack and this uses something called the rtc-config. Using the rtc-config you can add technologies like DMP’s and Server-Side bidding.
– Floor price optimization. The correct floor pricing set-up in Google AdManager can yield great results. I personally prefer using dynamic floor pricing technology, as doing this process manually can be very complex and time-consuming.

4. Core web vitals changes don’t favor AMP anymore

Last year Google released Core Web Vitals, and with this released stopped favoring .amphmtl over a standard mobile web .html. I believe this change is a great update to level the playing field, but when you look at the stats it’s extremely likely that AMP will remain on top. The Core Web Vitals update is part of the Page Experience algorithm update, as that’s its clear focus or with the move to everything being mobile-first maybe Mobile Page Experience Update.

Several of my favorite stats, these speak for themselves.

– AMP domains are 5 x more likely to pass Core Web Vitals than non-AMP

– 60% of AMP domains pass verses 12% non-AMP

The conclusion is like most superhero films, the superhero (being AMP in the case) will always come out on top. With that said.. we won’t talk about Avengers: Endgame, RIP Ironman & Tony Stark.

5. Speed of a mobile web can be faster, so why use AMP?

This is one of my favorite myths, as it’s not really a myth as it’s true. You can definitely optimize mobile web pages to be super fast, but in my option for most publishers that’s not a reality they should be opting for.

AMP out of the box is extremely fast and should be used where possible, unless the publisher has the resources and budget to continually invest in mobile web development. AMP is amazing for user page experience, it is backed by a large community and can perform financially for publishers and advertisers alike.

The analogy I always use here is always the same. In Fast and Furious you don’t see Dom (Vin Diesel) modifying a family SUV to be the fastest vehicle on the street, he always opts for a fast car and makes it faster. AMP is that fast car.

If you are interested in optimizing AMP then you should check out this on the amp.dev blog.

Conclusion

Publishers should start loving AMP as much as the readers of the content clearly do. The readers of the content should come first and the return on investment will come back to the publishers.

I will leave you will an extra thought.

What if the publisher was to run a 100% AMP website?

– Amazing user experience on all devices
– Extremely fast
– Single code base to manage
– Easy to maintain for high Core Web Vital results
– Very likely more visitors through organic search
– Increased revenues

Spoiler alert: This is happening and the results are wonderful.

The post 5 AMP HTML Myths Busted first appeared on Freestar.