The online advertising ecosystem is riddled with different parties wanting a piece of the revenue pie. Improve Digital, Google, AppNexus (among others) compete with their ad serving platforms, all claiming to offer the highest CPM for each impression.
Header Bidding has further complicated the setup, allowing publishers to include the different parties in one ad call in order to accept only the highest returning bid. However, with the many downsides – among other things, the number of resources required for setup and maintenance, the high risk of ad latency and increased site load times as well as negative impact on ad viewability – this is not a viable solution either.
As a Certified Publishing Partner and reseller of the Google DoubleClick stack, DQ&A knows how well the different Google platforms integrate with each other, enabling publishers to monetise their ad inventory while allowing for competition within the DoubleClick stack.
Google allowing for competition within their own platforms? Well yes. The DoubleClick sell-side platform, DoubleClick for Publishers, is a complex system with many features and functionalities that can be used to their fullest extent when used in conjunction with DoubleClick Ad Exchange. These features are the different line item types available when booking campaigns in DFP, but also the features Dynamic Allocation, DFP First Look as well as the different Deal and Auction layers that are available within DoubleClick Ad Exchange.
The competition available within the DoubleClick stack is loosely based around the rule of Vilfredo Pareto, an Italian engineer, sociologist, economist, political scientist and philosopher. A real jack of all traders, and primarily known for the 80/20 rule which is now also referred to as the Pareto principle. In studying income distribution, Pareto found that approximately 80% of the land in Italy was owned by 20% of the population.
Similarly, he observed that about 20% of the peapods in his garden contained 80% of the peas. Comparably, most publishers will find that 20% of their impressions bring in 80% of the revenue. A natural occurrence, since not every impression has the same value, even if they originate from the same website. That is, above-the-fold impressions are traditionally seen as more valuable than below-the-fold impressions. In the same way, viewable impressions receive a higher demand than those with a low viewability. Impressions that are sold in combination with Audience data, i.e. specific information about the user, are sold at a higher price than impressions sold anonymously. And these are just a few examples of the high disparity in the value of different impressions.
So how do the features and functionalities available within the DoubleClick sell-side stack help publishers get the highest possible CPM for each impression? How is the competition between the different impressions realised?
First of all, let’s look at the different priority levels that are available in DFP. Campaign managers can choose a priority level through the setting ‘line item type’. Based on the line item type, the Google algorithm determines which campaign should serve on a per-ad request basis.
‘Sponsorship’ and ‘Standard’ are the only guaranteed line item types, meaning that these aim to serve either a certain percentage of all available inventory (Sponsorship) or a specific number of impressions (Standard) within the time duration set for the campaign.
This means that Sponsorship and Standard are the top priority line items and will deliver the highest value impressions. However what if this is not the case? What if the direct agreement between the publisher and the advertiser through a direct deal, which results in a Sponsorship or Standard campaign in DFP, does not necessarily provide the publisher with the highest possible CPM?
That is, it is very possible that a buyer through Ad Exchange is willing to pay a higher CPM rate for the same impression, however now he does not have an opportunity to bid on the ad request as the Sponsorship and Standard line item types guarantee that the impression goes to these campaigns.
Although, not quite. This is where the next nifty feature comes in: Dynamic Allocation. Through DA, DFP guaranteed line items can compete with remnant and Ad Exchange line items. Importantly, this network-level mechanism is designed to maximise the publisher’s revenue without compromising reservations. That is, for guaranteed line items a temporary CPM or opportunity cost will be set based on the line item’s current delivery progress. Only if Ad Exchange is able to beat the max of the guaranteed temporary CPM, or CPM of any other eligible remnant line item, will the Ad Exchange line item serve.
Having said this, due to the sometimes high temporary CPM set by the Google algorithm, Ad Exchange does not often have the chance to compete with Standard and Sponsorship line items. To increase competition, publishers should consider using the Price Priority line item type more regularly, as this enables an optimal competition with Ad Exchange. That is, Price Priority is a remnant (non-guaranteed) line item type, that competes with other line items – including Ad Exchange line items – based on price. For campaigns with a short duration and where not much leeway can be granted in terms of the impression goal, Sponsorship and Standard line items will always be the best priority types, however for all campaigns that can run for a longer time period, Price Priority should be a publisher’s go-to line item.
The principle of maximum competition between line items through Dynamic Allocation and line item types such as Price Priority, is taken another step further with DFP First Look: through this feature, publishers can give (selected) Ad Exchange buyers access to inventory that is actually reserved for DFP guaranteed line items. Of course, in return for the opportunity to purchase these impressions ahead of the premium DFP campaigns, a higher price needs to be paid. This is realised through setting high floor prices, which ensure that Ad Exchange will only deliver an impression if a buyer bids more than this. Similar to Dynamic Allocation, DFP First Look allows for competition in real time on an impression-by-impression basis.
The next layer in the Google Yield Curve are the different Deals and Auction types that are available within DoubleClick Ad Exchange. Not only does Open Auction allow programmatic buyers to bid on publishers’ remnant impressions, but ahead of that, Private Marketplace, is provided for maximum yield. Private Marketplace is the combination of Preferred Deals and Private Auction Deals, to which selected buyers can be invited to purchase impressions ahead of the Open Auction at a higher CPM rate.
This CPM rate can either be fixed, in the case of Preferred Deals, or in the form of a minimum floor price in Private Auctions. Same as all other layers within the Yield Curve, the highest price wins the impression. Even though Preferred and Private Auction Deals are theoretically ahead of Open Auction, the competition is further capitalised through this ‘highest bid wins the auction’ principle; all Private Auctions are set to allow competition from the Open Auction, meaning that if an Open Auction buyer returns a bid that’s higher than the highest Private Auction bid, the Open Auction buyer will still win ahead of the Private Auction Deal.
Next in the competition-layered Google Yield Curve is Programmatic Guaranteed. This DFP feature allows publishers to sell their premium inventory in a guaranteed deal in DFP programmatically. Since publishers can offer specific parts of their inventory, including specific targeting settings that the buyer is looking for, they can benefit both from the buyer’s commitment (since it’s a guaranteed deal with a pre-agreed number of impressions), as well as from a higher CPM. That is, the buyer is willing to pay a higher price for impressions with specific targeting.
Last but not least is Exchange Bidding, also controversially referred to as ‘Google’s answer to Header Bidding’. Through this (beta) feature, publishers can choose to include specific third parties to compete with Ad Exchange through a server-to-server integration.
In other words, the DoubleClick sell-side stack has got you covered! Through the combination of DFP and AdX, and by using all of the many yield management features and functionalities offered within these platforms. Such as the different line item types, Dynamic Allocation, DFP First Look, the different Deals and Auction types, Programmatic Guaranteed and Exchange Bidding- the Google stack enforces and enhances competition on a per-impression basis. This all to ensure that you -the publisher- receive the highest possible CPM for each impression.
 See our blog post on DFP First Look.
 For more on the downsides of Header Bidding, have a look at our blog post.