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Google sweetens deal for publishers with dynamic price floors | Digiday

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Google is testing a new way for publishers to maximize their advertising revenue.

The feature — called a “dynamic price floor” by a publishing executive briefed on the plans — would automatically change the minimum sell price for ads sold through Google’s DoubleClick Ad Exchange (AdX) based upon advertiser demand.

A price floor is the lowest price at which an ad can be sold for through an ad exchange (a marketplace in which advertisers and publishers buy and sell ad inventory in real time). Publishers set price floors to ensure their ad inventory fetches at least a certain amount of money in a real-time auction. If a publisher sets a price floor of $2, it will only accept advertiser bids of $2 or more.

Dynamic price floors, however, change in real time in order to reflect the bid history for a given piece of inventory and ensure that it is sold at a price that better reflects its market rate. For example, say a publisher routinely sells a given ad through an exchange at $5 CPM, but the ad has a price floor of $3. Now, say an advertiser that often buys that ad at $5 decides to bid the minimum of $3. With a regular price floor, the ad would be sold at $3. But a dynamic price floor would take an advertiser’s bid history into consideration, pushing the minimum sell price up to $4 without the publisher having to change its settings.

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Google sweetens deal for publishers with dynamic price floors.

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