Ad Monetization Waterfall: eCPM Floors

Published by Digital Limbo on

Last week we analysed the differences between a manual and auto-optimized waterfall.

This time we will introduce the concept of floors but first it is necessary to understand why the eCPM decreases as the same user watches more videos ads.

Let’s say that the average eCPM from Network A is 10€ and from Network B is 9€.
With this premise we will want to show videos from Network A as it’s
paying more.

However, the more impression are served by the same network, the lower the eCPM is .

Why is that?

Because, essentially, from the advertiser perspective, the more videos the same user
watches, the lower her/his conversion rate is (they will be less likely to click on an ad
and actually install the advertised app).
Advertisers increase bids of their campaign because finally they have more chances to appear before other advertisers, hence increase the conversion rate of their own

Let’s assume this is the eCPM evolution for network A and B:

As mentioned, the eCPM average is higher for Network A, but the 1st impression of Network B has higher eCPM than the 2nd of Network B.

With this manual setup it’s not possible to get the best out of each network because we are imposing to the system to deliver every impressions from the top ranked network (A).

To avoid this situation, we need to setup eCPM Floors with each network.

When an eCPM floor is set up, you’re instructing a network to not serve ads that are below a certain threshold you’ve set.

For example, we want 2 separate calls for Ad Network A, one accepting a minimum eCPM of 20€ and another accepting minimum 15€:

The same can be done for Ad Network B, but with different values:

Now we can move from a manual top rank setup to use eCPM Floors and setting up a new waterfall:

With floors we basically make sure we get the best out of each network in our waterfall.

In the end our waterfall will look like this:

In the ideal scenario this setup has to be done per app, platform and country.

And remember, to configure different floors (also known as calls, zones or instances) on a mediation platform, first they need to be set up on the ad network dashboards.


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