Yield Optimization or Yield Management is a strategy used to maximize the value of digital advertising. This ultimately means selling inventory for the highest possible prices by providing the right ad to the right user at the right time in the right place. The focus of Yield Optimization is to use data and testing to manage pricing and inventory.
Let’s look at what factors are important to consider for effective Yield Optimization:
The simplest consideration is what you can immediately control; your site. Creating the right layout for inventory is vital to creating the right pricing strategy. Standard ad sizes of 728×90 leaderboard, 300×250 MPU, and 300×600 wide skyscraper work amazingly well on desktop and provide the base for many publishers’ standard inventory. Deciding on the number of ads, above the fold and below the fold positioning for certain formats can help in increasing yield. Identifying the best performing ad sizes will help when deciding on any changes to site layout ad design. User experience is driven by your site so understanding the data you have will determine what decisions you make. Metrics that relate to user-experience and behavior such as bounce rate, referral link, exit pages, average time on site, keeping users engaged is key to monetization.
Demand Stack Management
Once you have your site optimized to your requirements, ensuring your demand stack is in a healthy condition is definitely something you should look at. What this means is making sure you have diversified demand for each format you are looking to monetize. With technology, demand partners and seller models clearly set up. Strategies to optimize all these elements are key to effective yield management.
A basic consideration for managing advertising on your site is employing an ad server. By utilizing an ad server you are able to organize your advertising by position, format, pricing, and priority. Ideally, your most important ads would bring in the highest CPM and therefore have the highest priority. Likewise, your least important ads would come last and the CPM is almost negligible. Using technology to manage your targeting, settings, and capping strategies will lead to different results at different times. Most ad servers are compatible with many 3rd party partners and offer a reporting platform to monitor and analyze your results. Using technology partners and tools to collect, analyze, and visualize data is vital in yield management. As any changes you make are in direct relation to the data you collect from testing different methods and strategies. Technology is advancing at an alarming rate, ensuring you future proof your monetization by working and constantly assessing your tech and demand partners.
The digital advertising industry has become overly complex over the years. To the point where ad revenue for publishers can come from SSPs, exchanges, ad networks, tech vendors, ad agencies, and brands directly. Testing multiple partners is important in identifying which partner is best suited to your site. In most cases having a number of partners in each position can help in increasing competition and delivering increased revenues. Points to consider when selecting your demand partners are their technical capabilities and compatibilities, their demand sources which may differ based on compatibility and relationship, the type of advertising and formats they offer, or specialize in, especially as this can help in prioritizing your partners. Some demand partners may be more successful in different geographical regions too, so in some cases, a combination is necessary to fully maximize your yield if you have users in multiple locations.
Having the right combination of monetization models and formats in play can go a long way in your Yield Optimization strategy. Let’s run through a few examples:
Direct Deals, as the name suggests is direct access for individual buyers to your inventory and typically carries higher CPMs as there are no middlemen taking a cut. This usually carries the highest priority for delivery in your ad server.
Waterfalling still happens and still has a place. Making sure you have enough demand sources in the chain and that you avoid passback loops by either ensuring specific networks aren’t repeated too often or you end with a 100% fill network.
Google Ad Exchange, AdX, enables multiple buyers to access your inventory increasing competition for your impressions.
Header Bidding, a technical evolution that enables multiple buyers; exchanges, and SSPs to access and bid on inventory all at the same time.
EBDA stands for Exchange Bidding in Dynamic Allocation which allows Google’s AdX to compete with multiple 3rd party buyers as well as your guaranteed line items within GAM.
Native Ads bring greater visibility to their ads as they blend in with the content of your site, offering greater ROI. These can be placed outside of our traditional ad slots.
Video Ads often offer the highest CPM of any format and are highly engaging adding quality messaging to your content. If you have no video content on your site, you can still access video ads through native and outstream video formats.
Mobile Ads are a massive consideration for the modern world where users are increasingly accessing websites via mobile devices. Identifying partners with compatible formats and demand sources are key.
Perhaps the most common consideration people take into account for effective Yield Optimization is Pricing. What is necessary in this regard is your mathematics. Understanding the definitions and acronyms and their relation to your overall revenue is vital to effecting yield optimization decision making.
An audit of your pages and advertising will deliver you with an eCPM. This measure of your total ad revenue divided by your total ad impressions gives you an idea of the value your advertising brings. Breaking that down by placement, format, and page will help in testing and making decisions. Identifying metrics such as CTR (Click Through Rate) will give you an idea of your ads’ performance. This performance dictates the potential for higher competition, fill rate and CPMs. Using an appropriate Floor Price ensures that at each step and with each demand partner, yield optimization is at the forefront. Using a floor price makes sure thresholds and often quality standards are maintained. Dynamic price floors use historic eCPMs to automatically adjust price floors. With an appropriate floor price in place, an understanding of your advertising revenue by impression as well as performance, you will have a good idea around the Fill Rate of your advertising. This Fill Rate will help dictate your ongoing pricing strategies. Higher fill will mean less unsold inventory, but does this mean higher revenue. Often lower CPMs but higher fill result in higher revenue. In reality, all these factors need to be taken into account to understand how your ads are performing and what actions you need to take in Yield Optimization.