There are several reasons that publishers use Prebid Floors. Often floors are configured globally, across all bidders, including Prebid, Amazon and AdX. But in some cases, publishers will set different floors for different bidders.
Ad Quality
Ad quality refers to the overall standard and effectiveness of advertisements. It is common for low-quality ads to have lower cost-per-thousand impressions (CPMs), and setting a floor price can help publishers mitigate the negative impact of deceptive advertising and malvertising. By establishing a minimum threshold for the price of ad placements, publishers can deter advertisers who may engage in deceptive practices or distribute malicious content. This helps maintain a higher level of ad quality by discouraging ads that may harm the user experience or compromise user safety.
Inventory Price Protection
Publishers who have a direct sales team often rely on their inventory's value to generate revenue through direct ad sales. Price floors play a crucial role in protecting the value of this inventory. By setting minimum prices for ad placements, publishers can ensure that the value of their ad space is maintained, preventing undervaluation due to low-priced ad campaigns.
Price floors act as a safeguard against undervalued ad placements that could potentially harm a publisher's revenue and the perception of their inventory's quality. They also serve as a means for publishers to negotiate fair pricing with advertisers during direct sales transactions. By maintaining price floors, publishers can more effectively monetize their premium ad placements, providing advertisers with assurance that they are accessing high-value inventory.
Optimization
Setting dynamic floors is an optimization technique employed by publishers to maximize their earnings from programmatic ads. Dynamic floors are minimum prices that can be adjusted in real-time based on various factors, such as user demographics, ad performance, or market conditions. This strategy allows publishers to adapt their pricing dynamically, ensuring they achieve the highest possible CPMs.
By using dynamic floors, publishers can optimize their revenue by striking a balance between attracting advertisers and maximizing the value of their ad placements. Dynamic floor optimization helps publishers achieve better overall revenue and profitability, as they can continuously fine-tune their pricing strategy based on real-time market dynamics and campaign performance data. It allows publishers to respond to changes in the advertising landscape quickly and optimize their ad monetization efforts accordingly.