By Kean Graham, for Edwardsturm.com.
Programmatic strategy for publishers used to be so easy! Sign up to Google AdSense, implement ad tags on your site, and wait for checks to roll in. About a decade ago, running this strategy stopped being super lucrative. Today, even as the display advertising market seems to get closer to a Google monopoly, it has never been so competitive.
If you’re still only running Google AdSense, we’re here to help with three important steps to realize all that money being left on the table.
1. Implement the Google Ad Server called DoubleClick for Publishers (DFP)
An ad server is like the brain of the inventory. It allows a publisher to run direct sales’ ads in the same placements as programmatic ads. It also prioritizes which ads show for each placement and enables optimization to maximize the overall yield.
To only run Google AdSense directly on-page is to allow Google to have a monopoly of your ad inventory and leave money on the table. There are many other demand sources that you could use via an ad server marketplace to increase your yield and overall ad revenues. If you want to increase the ad revenue return on your traffic, implementing an ad server is the no-brainer first step.
When it comes to ad servers for publishers that monetize via programmatic, you’re not going to beat DFP. It is free for the first 90 million non-Google ad impressions per month, no ad server comes close in terms of optimization features, and it integrates with the best performance ad exchange in the world: DoubleClick Ad Exchange (AdX).
The most sophisticated programmatic publishers in the world use DFP for good reason. Without it, they would be leaving millions of dollars on the table.
2. Integrate DoubleClick Ad Exchange into DFP via Dynamic Allocation
Once you have DFP setup on your site, it’s time to integrate the best performing demand source: AdX. Since Google owns DFP and AdX, they were able to integrate both technologies to enable real-time communication between the technologies. This is called dynamic allocation.
Dynamic allocation enables AdX to tell DFP the bid it will pay on every impression. DFP can take this real-time bid and compete it against all other competing demand sources at pre-determined priorities that the ad optimization expert determines based on past revenue per thousand impression (RPM) statistics.
AdX dynamic allocation is powerful because you know that AdX will only win the ad impression when it bids the most. When publishers implement AdX dynamic allocation versus other demand sources for the first time, they typically see dramatic increases in RPMs and ad revenues on a regular basis.
AdX on dynamic allocation does not achieve its potential until other demand sources compete against it at price priority level. These other demand sources are called managed demand. Price priority allows AdX on dynamic allocation to compete against managed demand on an RPM level. It is up to the ad optimization expert to update the RPM priority levels of each demand source on a regular basis to ensure a fair auction.
Most managed demand has something called a passback: when a demand source does not want an ad impression, it does not serve an ad, and it instead sends that same ad impression to a different pre-determined ad network. This setup is also called a waterfall.
When ad optimization experts decide what RPM priority a demand source should be set at, they should calculate the real RPM:
- Real RPM = (First look demand source revenue + total passback demand source revenue) / (Total ad impressions via DFP/1000)
To properly calculate the real RPM, passbacks must be unique to each ad tag so that passback revenues can be isolated to each managed demand ad tag. This process requires a team of ad optimization experts to calculate hundreds of real RPMs daily and make the subsequent optimizations.
Passbacks and the calculations of real RPMs are inefficient, but recent trends have had publishers move towards a more optimal setup utilizing technology.
3. Implement Header Bidding
Header bidding is the evolution of managed demand. Rather than updating price priority DFP line items on a daily basis, header bidding receives real-time bids and communicates that to DFP to accurately compete against AdX on dynamic allocation.
Several demand sources have their own header bid solutions that publishers can implement directly on the header of their pages and have a DFP setup that splits line items via pricing tiers. The pricing tiers enable the accurate real-time bids versus AdX.
For example, Sovrn (a online advertising technology firm) bids via their header bid solution at $2.50 for an ad impression. That impression is communicated to DFP and the $2.50 DFP price priority line item is initiated to compete against AdX. Then, AdX bids $2.10 for that same impression. DFP compares those two bids and chooses Sovrn to serve the impression. In this scenario, you know that the highest bidder won the impression free of any passbacks and free of the need to adjust price priority levels on a daily basis (since technology already automated the price allocation). This header bidding setup not only yields dramatically higher RPMs but also decreases the need for daily DFP management.
Further innovation of header bidding has seen the rise of header containers. A header container is a consolidated point of many header bid solutions that only require one setup. They are more efficient than setting up most header bid solutions and enable technology optimization such as improving ad latency and overall header bid yield to make the ad inventory more competitive. This technology optimization requires a dedicated team of developers and ad optimization experts, but is definitely worth the investment based on the high ROI that other publishers have seen.
It is recommended to complete each step in the order given. Below are the recommended ad traffic thresholds to initiate each step:
- DFP setup: 1MM page views per month.
- AdX vs. managed demand on DFP: 2MM page views per month.
- Header bidding setup: 10MM page views per month.
If you decide to complete each step in-house, make sure to dedicate sufficient resources. The DFP setup can have a steep learning curve, but can be learned in-house. Running AdX on dynamic allocation vs. managed demand requires at least one full-time ad optimization expert optimizing every day.
You should go straight to a header container rather than implementing individual header bid solutions as they tend to be cumbersome. Again, make sure you have a developer team dedicated. It takes about two to three months for a team of three full-time developers and an ad optimization expert to implement an open-source header container. If you are not able to dedicate those type of resources, there are partners that can manage optimal header bid and managed demand setups.
Whether you decide in-house or to outsource, choose one. The worst mistake you can make is to leave money on the table and not pursue each ad optimization step at each traffic threshold.