If you’re a digital publisher, you know that revenue management and maximizing yield involves more than analyzing eCPM trends. In part one of this two-part series, we discussed simple tips that could be used by all media companies as the foundation for yield optimization strategy.
Understanding your audience is a must, and an easy way to do that is by observing key metrics such as fill rates, rCPM, RPM, ad requests and floor prices. We suggested a strong focus on quality inventory and historical data analysis as a starting point.
Progressing through part two, we’re outlining best practices specific to the latest industry challenges. Buyer behaviors, seasonality trends, unified pricing rules and website redesign are just a few relevant topics to consider. How else are you planning to future-proof your organization’s revenue growth? The solution to any problem usually lies in asking the right questions first.
Understanding Buyer Behavior
Accurate pricing starts with predicting accurate demand. What are buyers willing to pay for inventory? More specifically, what are they willing to pay for your inventory compared to your competitors’ inventory? Pull reports to observe trends over the course of a week, month, quarter and year. Remember to remove any spikes in traffic or seasonal holiday traffic when analyzing the reports.
Seasonality is particularly important now in Q4. Buyers may be willing to buy larger volumes at higher rates as they’re exhausting 2019 spend. It’s fair to assume that volume will decline as soon as we enter Q1.
Another important outlier to consider is upcoming political spend. What are other sellers doing to mitigate the high political spending and to compete with it? Where are advertisers shifting their budgets? It will be difficult to compete with rates for remaining CTV inventory, for example, so buyers not interested in competing with political advertisements will likely purchase more digital display instead. Consider increasing your online display or native ad rates during that time to meet buyer demand.
First Price Auction Considerations
Now that Google Ad Manager has also moved from a second price to first price auction, it’s even more important to note that setting your floor price at zero is not recommended. Buy-side technology uses algorithms and other techniques to estimate the value of sell-side inventory.
Setting your floor price at zero may seem like a decent way to increase your overall revenue, as it will open your inventory to all buyers, but it’s ineffective in the long run. The value of your inventory is largely determined by the price, and buyers today are willing to pay more for quality and brand safe inventory. Also, establishing a floor rate and optimizing up or down will allow more accurate predictions in the future.
Website Redesign or Restructure
This tip is probably obvious to most but we couldn’t leave it out. When is the last time you’ve done an analysis on the design of your website? Are you lazy loading your ads to help with viewability rates? Are the majority of your ad units above-the-fold?
Do your video ads typically perform better than display or native? Do a deep-dive analysis of performance by ad unit, channel, page and vertical to determine what changes to make. Sometimes the smallest changes have the greatest impact.
Don’t Forget to Ask These Questions
- Which verticals have the highest sell-through?
- Are buyers paying higher rates for specific time(s) of day or day(s) of the week?
- Is it worth considering different pricing strategies for weekdays versus weekends?
- How much more are buyers willing to pay for inventory with higher viewability rates and is it worth selling based on measured vCPM?
- Are buyers purchasing more inventory from certain browsers or devices over others?
Once you begin analyzing your historical performance and RPM (revenue per 1,000 impressions) you’ll begin to understand the market, competitor tactics and buyer behaviors. The more you understand and optimize, the easier it is to develop a clear yield strategy and promote long-term revenue growth for your organization.