When we present our service for them, quite often they ask whether the uplift on Google AdX<\/strong> will be wasted by the drop on header bidding.<\/p>\n\n\n\n [mc4wp_form id=”407″]<\/p>\n\n\n\n In addition, without data science and advanced engineering, it\u2019s almost impossible to manage floor prices dynamically. This results in a situation where floor prices are not changed or regulated often. Sometimes they trade for days or even weeks.<\/p>\n\n\n\n As millions of auctions go through floor prices, each floor price generates some losses and adds some value. The same price is neutral, blocking, or value-added for different auctions. <\/p>\n\n\n\n We consider the yield optimization successful when the sum of blocked revenue is smaller than the sum of additional revenue generated by pricing.<\/p>\n\n\n\n Now, let\u2019s add two more SSPs in the header to increase the complexity of the picture. Of course, we expect that new demand partners will bring us more bids per auction to increase auction pressure and simply let us earn more money.<\/p>\n\n\n\n No. In that case, Google AdX<\/em> offers the highest offer and other SSPs will not win the impression. Let\u2019s consider all pricing scenarios:<\/p>\n\n\n\n Again, keep in mind that although all pricing strategies different than zero create all the above scenarios, effective yield optimizers are those that can ensure additional money generated by pricing is bigger than lost money<\/a><\/span>.<\/p>\n\n\n\n This is easy. When one of the header buyers offers the highest bid, they win. Google AdX<\/strong> can be optimized or not, but as long as there is no magic, then no yield optimizers can charge a buyer more than they submitted to the DSP. As a publisher, you are paid exactly what the buyer bids.<\/p>\n\n\n\n Of course, also, in this case, header-bidding revenue can\u2019t be affected by pricing management on Google Ad Exchange. <\/p>\n\n\n\n Just after a publisher needs to modify Google pricing, they can increase or reduce the exclusive header-bidding range. <\/p>\n\n\n\n When Google prices increase, there is more space with no Google competition for header partners and they can spend more money. <\/p>\n\n\n\n Meanwhile Google pricing decreases, header partners face more competition. This is the only case when header-bidding revenue may drop, but as a publisher, you still earn more because all header bids that lose with Google lose because Google simply pays more for the impression.<\/p>\n\n\n\n One more thing: From the strategic point of view, the exclusive header-bidding range shall be reduced anyway. If you optimize AdX, you shall apply a quite consistent pricing for header demand. Buyers are smart and have much smarter tech than the sell-side. <\/a><\/span><\/p>\n\n\n\n If they see that it\u2019s always cheaper to buy the impression through the header, they will buy through the header, reducing your revenue. <\/p>\n\n\n\n If you see more money after the pricing is applied to Google, you can be sure that it came from advertisers. Definitely, it is not wasted by the loss on the header side. Despite that, don’t forget the cost of optimizations.<\/p>\n\n\n\n No matter if you optimize with your existing yield team, hire a data scientist, or implement a technology that\ndynamically manages your pricing for Google AdX<\/strong><\/a>, there will always be a cost for optimization.<\/p>\n\n\n\n As a publisher, you should track additional revenue and optimization costs in order to keep them in a healthy relationship.<\/p>\n\n\n\nWhat Is AdX Optimization?<\/h2>\n\n\n\n
To understand the problem, we need to be on the same page on what we understand AdX optimization<\/strong>, or more generally, second-price auction optimization to be.<\/p>\n\n\n\n![\"google](\"https:\/\/yieldbird.com\/wp-content\/uploads\/2019\/03\/wy1.png\")
<\/figure>\n\n\n\n
Do you like what you’re reading? Subscribe our newsletter for more content like this!<\/b><\/h3>\n\n\n
Let’s take a look at all levels of floor prices in a standard auction<\/b>.<\/h5>\n\n\n\n
<\/li><\/ul>\n\n\n\n
Unfortunately, Yield Managers can\u2019t set up a floor price after they get all the bids. They need to do it before the auction happens. <\/p>\n\n\n\nBasic Header Bidding (or EBDA) and Google Ad Exchange Auction<\/h2>\n\n\n\n
![\"adx](\"https:\/\/yieldbird.com\/wp-content\/uploads\/2019\/03\/wy2.png\")
<\/figure>\n\n\n\nScenario 1: AdX is not optimized and the second bid comes from the header<\/h2>\n\n\n\n
Keep in mind that SSPs in the header are using first-price auctions, which makes things even more complex, but this is not changing the situation on the level of a single auction.<\/p>\n\n\n\nCan AdX optimization generate a drop in header bidding or EBDA revenue?<\/h2>\n\n\n\n
To summarize this scenario:<\/h3>\n\n\n\n
Scenario 2: AdX is (or is not) optimized and the highest bid comes from the header<\/h2>\n\n\n\n
![\"ad](\"https:\/\/yieldbird.com\/wp-content\/uploads\/2019\/03\/wy3.png\")
<\/figure>\n\n\n\nScenario 3: Modifying the exclusive header-bidding range<\/h2>\n\n\n\n
When a publisher initially has the average floor price for Google AdX<\/em> set higher than the average floor price for header partners, they create the space within which only header-bidding partners can win the impression. Google is simply blocked there.<\/p>\n\n\n\n![\"adx](\"https:\/\/yieldbird.com\/wp-content\/uploads\/2019\/03\/wy4.png\")
<\/figure>\n\n\n\nMake sure<\/h3>\n\n\n\n
To make sure you earn more money, you can sum up all the revenue (like AdX<\/em> and header) and compare them to some independent metrics, like the number of visits from Google Analytics.<\/p>\n\n\n\nWho pays your bills?<\/h3>\n\n\n\n
Pricing is key to optimizing programmatic revenue, and good pricing always pushes advertisers to pay you more. <\/p>\n\n\n\nOK, this is a theory, but when I started AdX optimization, I saw header revenue drop<\/h2>\n\n\n\n
If you see something like this, then you probably have a technical bug. Especially if you implemented a technology that set up pricing dynamically.<\/p>\n\n\n\n