Over the past few years, bidding has gained more importance among monetization methods. This trend has gained even more momentum, particularly in light of the fact that from October 31, 2023, Google has focused on real-time bidding auctions in the case of app monetization. Overall trend resulted in some changes to the way ad monetization is handled. While waterfall optimization is still worth implementing, there are now alternative options available as well. One of the features is the optimization of minimum eCPM floors – previously mainly popular among web content but slowly ever-widely applied in the case of mobile apps. It’s now available for those using the Bidlogic ad mediation solutions – both on AppLovin MAX and Unity® LevelPlay.
Setting minimum ad bids
Bid floors (aka CPM floors, floor prices) is a function allowing for setting minimal eCPMs bid level below which we don’t want our ad inventory to be sold. Such bid levels can be set for particular countries or mediation groups consisting of many countries. In general, a minimum price is set, and ad impressions within a particular ad mediation group or country cannot be sold below this established price. It’s a common practice to optimize the waterfalls by manipulating the bids inside the waterfalls.
Just to remind you of the difference between waterfall and bidding: in the waterfall, the impression is sold for the first bid that meets the floor criteria’ whereas, when it comes to bidding instances, the wins are determined by the highest bid offered by the network in the auction. The hybrid most common model at the moment compares the results from waterfall and bidding and selects the highest value. After the recent shift, moving more revenue to bidding networks and optimizing bid floors along with the waterfalls makes even more sense and allows you to have control over all impressions.
Is it worth it? Data behind the optimization of minimum eCPM floors
Bidding was initially developed as a web desktop solution for ad mediation after waterfall domination in the ad-selling industry. Solutions like managing floor prices per ad source helped web publishers maximize their ad revenue. It took some time for the mobile world to adapt, but the time has finally come.
As we already stated, setting minimum eCPM floors protects your ad impressions from being sold at too low prices. To verify the validity of this solution, over the course of the last few months, we performed multiple tests, which in the end, proved the effectiveness of applying the minimum eCPM floors strategy. In the last round of the tests, run after the recent changes with Google Bidding in November, we noticed that 74% of cases brought an average 7.79% increase in ARPDAU.
Floor prices in MAX and LevelPlay mediations
Users of both MAX and LevelPlay are able to set eCPM floor prices; however, some differences occur:
- When it comes to LevelPlay mediation, you can set the floor price for all bidding networks for each mediation group separately in the same window as for waterfalls. The floor is set for all the bidding networks and doesn’t limit the waterfall, but there’s no option to set it for each individual network;
- Developers using AppLovin MAX can set bid floors in different countries or regions. Importantly, contrary to LevelPlay, while setting a bid floor, you are not only deciding on the bidding minimum price but also on waterfall (so it’s impossible to apply different settings for them). This means that your instances in the waterfall with the eCPMs below the bid floor price won’t return any impressions, which is an additional restriction from MAX and hopefully will change in the future.
New Bidlogic feature to optimize minimum eCPM floors
When deciding on a bid floor price, it’s best to adopt the principle of optimal price, which can be set based on the current performance of your waterfalls and bidding instances. You should look for bid floors for each country or group of countries in each ad format that will make advertisers purchase at higher rates but will not cause a significant drop in the number of impressions. In other words, the gain from increased eCPMs should not be offset by lower IMP/DAU. The best way to achieve this is through continuous testing, as minimum bidding rates should not be set once and for all but updated according to the application’s performance. Additionally, it’s worth doing it in a largely fragmented way, so non-identical prices are set to different countries and regions. The best practice is to start with low bids, which can be increased over time and evaluated based on the performance. After you find a sweet spot for the floors at each ad format and country/region – analyzing network trends and A/B testing should allow you to keep the monetization optimized.
In December 2023 Bidlogic introduced a tool that aims at automation of bid floors optimization. This new solution allows us to test the minimum eCPM levels and improve monetization effects in particular countries and mediation groups. By regularly optimizing the bid floors we are able to increase revenue from the bidding networks. Our algorithms analyze the performance of individual network trends, historical data, and A/B tests to adjust the price floor accordingly.
Additionally, we still use algorithms to take care of waterfall eCPM instances. Thanks to our A/B test in waterfalls, you don’t have to worry about manually controlling your ad mediation. The newest Bidlogic feature, combined with our already proven solutions, covers the full scope of advertising monetization in mobile apps. Our vision for mobile application optimization involves restricting sales of ad space below particular thresholds by country and supporting monetization through waterfall management customized for each ad format. All to ensure that you’ll be satisfied with the final obtained ad revenue.
