The ad business is complex as there are multiple demand sources all paying different CPMs, while others only fill if certain criteria are met. It is enough to keep you up at night.
Publishers who work with multiple demand partners have to figure out how to optimize their ad stack. One of the most popular optimization tools is a waterfall. Waterfalls allow publishers to prioritize their ad inventory for different ad networks and exchanges in order to get the highest CPM. If the network does not meet the price floor, the ad impression is passed on to the next network in the waterfall.
While it may sounds easy, a waterfall is prone to issues. One issue with waterfalls is that each step in the process will slow down ad deployment, resulting in a loss of 5%. Additionally, publishers might not be able to maximize revenue, as a network further down their stack might have been willing to pay more for the impression in question. Publishers always have to keep their eyes on their ad stack in order to maximize revenue and ensure that the right networks are in the right order. To call this a time consuming process would be an understatement.
Waterfall Yield Management
Being publishers ourselves, we have dealt with this issue in the past and have developed an Ad Optimization System to help optimize our ad inventory.
Determining which ad unit will produce the highest yield requires a great deal of data. With around 1 billion ad impressions served each month, this system allows us to analyse a great deal of traffic profiles and demand partners under different circumstances. Using our proprietary multi-variant testing allows us to create a profile of different publishers' site traffic. This model evolves over time, further improving ad performance.
Using machine learning and our decision engine technology, we are able to make real-time decisions to help publishers stack the deck in their favor. Every time an ad is displayed to a user, our technology will analyse the available ad inventory and decide which ad network is going to serve the ad with the highest CPM. If that network doesn't fill the impression, our system will record that and passback the impression to the second best network until the ad is served.
Our Ad Optimization System puts publishers in control by speeding up their ad deployment, decreasing loss, and increasing yield, all without having to manually adjust their ad stack.