Publishers who work with multiple ad networks often have a solid idea of what their inventory is worth. Knowledge empowers publishers to extract the maximum value out of their ad space in this “programmatic bull market” we are seeing in 2014. Brand and Performance based advertisers are willing to bid at very high CPM’s to win ad inventory that performs well, is safe and has a targeted and engaged audience. With this knowledge you, the publisher should understand that your inventory is as valuable as you can make it by strategically working with high performing and trusted ad networks. Setting a bottom line price on inventory can extremely lucrative by linking and chaining multiple ad networks into your adstack. This is called an “impression waterfall.”
Impression Waterfall (cpm floor) Infographic: 30 Cent CPM Floor Example
The user loads the web page and the AdServer instantly gathers data and profiles the impression. This data is sent to the Ad Network who is placed at the top of the waterfall.
Ad Network #1 programmatically offers the impression to it’s marketplace which could include internal managed demand advertisers, external buyers, CPA offers private marketplace bidders or any other medium that has access to automatically bid on the impression. This first ad network did not bid on the impression above $.30 based on toggles that are turned on and off on their back end. The impression reads the default creative and the impression is sent to ad network #2.
Ad Network #2 repeats the same process as the first network and again does not win the impression. Its bid is too low and defaults down to the third ad network.
The final ad network in the waterfall bids at $.32 to win the impression and serves the winning creative whatever it may be.
CPM Floor Hypothetical: the last network in the waterfall does not buy the impression
If the last ad network does not purchase the ad impression it will use its last line of defense to monetize which is usually a Supply Side Platform. SSP’s specialize in monetizing long tail impressions and have large demand for bottom of the barrel, remnant inventory. Most likely if the impressions defaults down to the SSP it will not be bid on at the floor price and will receive a lower bid, programmatically. Sometimes publishers would rather serve an in-house ad that links to their content instead of serving an ad at a reduced price
What Are Default Creatives in the CPM floor model?
A Default creative is a piece of ad code that is implemented by each ad network involved in the waterfall in order to pass the impression down the chain if the network’s system decides not to place a programmatic bid on the impression. It is the actual piece of code that is called upon unique to another advertiser demand source down in the waterfall. Keep in mind all of these actions occur in real time.