The feature should increase the prices of publishers’ paid inventory without negatively affecting their overall revenue.
Last week, Google announced to advertisers that starting in early June, it would begin rolling out optimized default pricing to improve publisher ad revenue. For publishers, we see this as a positive move from the tech giant: more automated signals to correct the mismatch between what buyers are willing to pay and what publishers receive for their ads is a good thing .
And, while the overall yield increase is significant — we found up to 10% in our internal testing with Google’s open beta — price floors are only communicated to programmatic buyers via AdX and Open Bidding ( OB) from Google.
This means that the new floor has a disproportionate impact on alternative revenue streams (e.g. Prebid) since publishers using other channels do not have access to Google’s new floor data. Buyers using these channels cannot modify their offer accordingly, which makes their offers less competitive in the market. Unsurprisingly, we saw AdX’s share of wallet increase.
So while we applaud Google for taking steps to drive more value for publishers through this initiative, we believe that everyone in the ad tech market should have access to the same information, at the same time, regardless of regardless of the request channel in order to be fair and transparent. ecosystem to thrive.
What is Optimized Pricing?
According to Google, optimized pricing will protect the value of publisher inventory by using machine learning to intelligently raise auction floor prices to more accurately reflect inventory value and prevent buyers from being able to price it. buy at a price lower than its value.
For publishers sending offers via AdX or OB, Optimized Pricing will be enabled by default, launched initially on a subset of web traffic, then gradually rolled out to more traffic over time.
But publishers also rely on other sources of demand, such as Prebid, which runs a separate auction and then sends winning bids to compete in Google Ad Manager. Prebid’s highest bid can still lose the auction as it competes with other sources of demand – direct advertising or Amazon TAM, in addition to AdX and OB.
Buyers therefore need to know the asking price for a print, otherwise they risk bidding too low and not winning. If AdX and OB auctions have floor price information for their buyers, but Prebid auctions do not, buyers cannot change their bids. before the auction to give yourself the best chance of winning an impression.
To further explore the idea of audience attention and learn how publishers can leverage engagement to maximize ad revenue, download our latest book, Capturing the Signals: How Reader Attention Can Drive More Revenue.
Disclosure: What’s New in Publishing is 100% owned by Sovrn Holdings, Inc.