How to Deal With Troubleshooting Revenue Fluctuations in Programmatic Advertising?
Dealing with revenue fluctuations in programmatic advertising, especially drops, can be quite challenging. As a publisher, you always strive to…
Dealing with revenue fluctuations in programmatic advertising, especially drops, can be quite challenging. As a publisher, you always strive to optimize revenue, but identifying the root cause of drops requires a deep understanding of the various factors that influence the advertising ecosystem.
In this article, we will explore the sources of troubleshooting revenue drops and discuss how to differentiate between general market trends and areas that need improvement. Let’s start by highlighting some crucial principles to remember during the troubleshooting process.
Keep reading if you’re eager to take charge of your ads revenue and find practical solutions for revenue fluctuations in programmatic advertising. Let’s dive into ad troubleshooting and learn how to safeguard your revenue from pitfalls.
Before we can conclude that the drop in revenue is dictated by reduced spending by most advertisers, we need to check several elements to be sure that technical errors – in the form of both reduced ad request issuance and declines on the part of a specific revenue source [i.e., reduced spending on the part of Ad Exchange, Open Bidding, Header Bidding] or even a particular SSP – are not responsible for the sudden drop in revenue.
Before we go through the potential causes of the declines, let’s introduce some important principles:
Once we know where it fell, what fell, and that it was not due to seasonality, we can consider the most important thing: WHY DID IT FALL?
We’ll start with the most trivial issue (and we won’t dwell heavily on it):
We are examining whether the magnitude of the revenue declines is related to the decline in the volume of advertising requests per unit and the decrease in pageviews on the site. Here, it is essential to consider an implication, meaning the occurrence of these two factors simultaneously; otherwise, we will encounter a problem.
Revenue is generally expected to decrease less than advertising requests and page views. This is attributed to the fundamental economic law of supply and demand, where a decrease in resource availability generates a higher demand for them. A well-adjusted pricing policy is necessary to achieve this relationship, maximizing revenue by “squeezing” as much as possible out of advertisers, considering the lower volume of potential ad impressions.
If the requests experience a different trend than the page views, it indicates a technical problem, and some collision is likely preventing the ad requests from reaching the ad server. In such cases, we need to consult with an AdOps specialist who can review the technological elements and identify any conflicts that might be blocking the broadcast of the requests.
However, let’s assume that traffic has increased, but revenue continues to fly downward. In that case, it’s a good idea to focus on the next aspect of…
This one is much more complicated, and here’s why: within the Open Market, a drop in one impression usually leads to drops in subsequent ones. This happens due to the competition between impressions and the aggressive behavior of advertisers. When Ad Exchange buyers generate a lower eCPM (and consequently lower prices in programmatic), they pull other competitors to do the same.
However, let’s start with something easily and quickly checked (if you have the right technology). We need to verify whether all intended platforms in Header Bidding have access to buy space. This can be achieved with a tool that pins bids with SSPs, ideally in real-time. Google Ad Manager doesn’t handle this issue very well, as it not only has reporting delays but also incompletely reflects the actual performance of platforms. Here, tools with direct connections to SSPs, such as Prebid Stack, come to the rescue. Such a tool’s reporting system can swiftly identify which platform has stopped bidding for a given space due to changes in ads.txt. In more complicated cases, the customer service of a particular SSP can assist.
Once we are certain that all SSPs are bidding as they should, we can move on to checking Open Bidding. Here, we need to ensure we haven’t lost any Yield Partners from the auction. Finally, we can proceed to examine Ad Exchange. Open Bidding was intentionally only briefly mentioned because I haven’t encountered a case that significantly influenced monetization.
Ad Exchange, on the other hand, poses quite a challenge to troubleshoot because we are treading dangerously close to a critical boundary: DEMAND. However, at this point, we won’t delve much deeper into that complexity. We’re still a little way off from crossing that line!
What predominantly impacts Ad Exchange buyer traffic is clicks (AdSense’s legacy lives on forever), and the CTR ratio should be the first thing to check. If the ratio of clicks to impressions has dropped, it indicates that AdWords has also experienced a decline and possibly led to more advertisers withdrawing from the Authorized Buyers pool. When we identify that the CTR is responsible for this turmoil, we have several approaches to attempt to remedy the situation:
If the CTR turns out to be normal, we need to delve deeper into the buyers. Analyzing advertisers will answer whether the declines were influenced by one particular buyer setting the tone for space sales or if it’s a collective trend of reduced spending. In the latter case, we can confidently attribute it to a decrease in demand. Our options are limited then, and we simply have to wait for better times.
IMPORTANT: It is crucial not to switch these steps, as a decrease in CTR will also lead to a corresponding drop in traffic from advertisers. These two different causes of revenue declines must be distinguished.
The last aspect is more advanced, as it involves the distribution of guaranteed emissions, which complicates the picture we outlined earlier. When analyzing declines in programmatic, we are operating in two dimensions of advertising requests and revenue:
This is because the budgets of direct and programmatic campaigns are usually separate (although one impression sneaks the other the opportunity to buy space). Because of this, we encounter sudden drops in programmatic revenues due solely to an increase in the share of direct campaign impressions. This has the effect of reducing the space for programmatic impressions.
Examining revenue fluctuations in programmatic, particularly in the context of the Open Market, poses challenges due to the dynamic nature of demand. Differentiating between aspects we can improve and the overall market trend requires a comprehensive analysis of several key elements. Investigating whether the sudden drop in revenue results from technical errors, such as reduced ad request impressions or decreased spending from Ad Exchange, Open Bidding, Header Bidding, or a specific SSP, is crucial.
Understanding the underlying causes of these declines demands a detailed analysis and a deep understanding of various aspects of the advertising market. To achieve this, utilizing tools that aid in monitoring changes and quickly identifying errors becomes essential. Often, distinguishing these declines from changes in demand is not easy. Gaining proficiency in analyzing selected elements will help prevent jumping to hasty conclusions.
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Regional Growth Director
Regional Growth Director
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