The Spectrum of Publisher Ad Stacks

By Sortable |
November 22, 2016
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One of the benefits of working with a large number of publishers is that we’re able to gain a deep understanding of their unique needs. As we’ve learned more about how publishers set up their ad stacks, we’ve realized that there are a lot of points that we cover over and over again.

There are a few key factors that we consider when assessing our publisher’s strengths and weaknesses, and these factors should be a solid starting point for publishers to determine if they’re maximizing their revenue.

There are typically three layers of complexity that a publisher might be using in their advertising tech stack: tag-on-page (like AdSense), ad server (like DoubleClick for Publishers [DFP]), and header bidding.

Tag-on-page (e.g. AdSense)

The typical starting point for publishers exploring advertising options for their sites is the implementation of AdSense. AdSense is easy to work with and allows publishers to begin generating revenue without much headache or technical know-how required.

AdSense is easy to setup, and the ads closely match the website content automatically through keyword matching. However, it is easy to reach the limits of AdSense’s ability to generate revenue, and there are a couple of key factors to consider when using AdSense:

  • AdSense can bring great performance
    • Publishers that have very specific ad placements, or that command niche verticals that mesh well with advertisers can be rewarded for serving those specific units and content.
    • AdSense rewards high CTR ad placements, which can then feed back into the network and result in high CPMs from advertisers over time.
    • Capable of high fill rates from Google’s large network of advertisers.
  • AdSense lacks competition
    • AdSense is a great place to start but, without any differentiated demand sources, it may not pay the true open-market value for impressions. AdSense awards ad impressions to the Google network by default.
    • AdSense can draw from a massive advertising market through Google, but differentiated demand can be found outside of the Google ecosystem.
  • AdSense is fully automated
    • While many publishers appreciate AdSense’s simplicity, the lack of customization options can be seen as restrictive. Publishers looking to do more may have looked at DFP or header bidding as more attractive options, but have not had the resources to act.

In order to address some of these shortcomings, publishers can add other ad networks or exchanges that provide different demand sources than AdSense does. Ad networks and exchanges are most commonly setup through an ad server like DFP.

Ad server (e.g. DFP)

As publishers become more sophisticated, they might move on to using an ad server like DFP. It requires a higher level of technical expertise, which means that publishers using DFP probably have one or more people knowledgeable in advertising operations in their company who are responsible for maintaining their DFP accounts and configurations.

The most straightforward way to configure DFP is to prioritize advertising sources in a “waterfall”. This is done in an attempt to introduce some competition and increase revenue for the site by arranging the networks and partners in decreasing levels of priority (helping to address the point we made about AdSense lacking competition above).

  • Waterfall
    • Most publishers (outside of standard AdSense setups) are doing some version of a waterfall.
    • Waterfalls arrange advertising buyers in a linear fashion. Each buyer (be it a network or direct partner) is put in a queue and has the opportunity to serve the impression after the buyer ahead of them has rejected the impression.
  • Pricing floors
    • Price floors are used to assign tiers to advertising demand sources. They allow publishers to set rules for how their ad placements are viewed on the market, and can be customized for each of their partners.
    • While pricing floors can help ensure a high CPM for a site, they do directly affect the ability of the site to maintain a maximal fill rate.

Using the waterfall configuration works for most publishers. And, if a publisher drives enough traffic or commands a specialized audience, they may be able to secure direct campaigns with select advertisers. Direct campaigns ensure decent CPMs for the site and help foster ongoing relationships with advertisers. Publishers at this level of sophistication are very close to the point of considering header-bidders in an effort to create some true competition and maximize the revenue from each impression.

Header Bidding

This represents the highest level of publisher sophistication and complexity. Publishers using header bidders are focused on getting accurate impression pricing for their sites, and are usually willing to put additional resources towards the setup and maintenance of their advertising tech stack in order to increase yield.

Header bidding requires the use of an ad server to serve the creative of the winning bidder. The ad server also provides the ad tags that are seen on page, within which the ad creative will serve. This is commonly handled through DFP, but can also be done with other ad servers.

When publishers start thinking about implementing a header-bidding solution, they have additional technical considerations:

  • Timeouts
    • These can be set according to the placement and geographic location of the impression. Timeouts can be optimized on an ongoing basis to maximize both fill percentage and CPM.
  • Viewability
    • Some advertisers pay for campaigns against the viewability metric. This means that a site under these campaigns should be optimized for a high viewability layout.
  • Resource use
    • Header bidders are more complicated and take more time to build and maintain.
    • If there are only two or three bidders implemented, then the competition that header bidders are supposed to promote is not fully realized, and may not provide enough of a benefit to offset the latency introduced by the use of header bidding.
  • User experience
    • Header bidding can decrease the performance of the page. Timeouts for bidders are generally set to much greater thresholds than the timeouts typically used for waterfall ad calls.

Publishers should understand their business and choose the ad stack solution that works best for them. We hope that running through these items can help nurture a better understanding of how advertising technology works and result in business improvement for everyone involved.

If all of this information seems overwhelming, or maybe you’ve done half of the things listed and didn’t realize that the other items should be taken care of, maybe it’s time to ask us (Sortable) how we can help.

Find out where your site sits on the spectrum

Our team of experts is ready to help you optimize your site's performance.

(Also, we explore all corners of the ad tech industry, everything from Google's position in the market, to how AdX rules affect CTR, and if above the fold ad placement really matters.)

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