The #1 Monetization Mistake That Loses Publishers Ad Revenue

#1 mistake that loses publishers ad revenue

Since 2013, we at Adnimation have been helping hundreds of publishers increase their ad revenue. And while publishers come in many different shapes and sizes, there are certain recurring issues that we encounter.

A recent audit of 120 websites found that one issue was more prevalent than others; in fact, it occurred in nearly every case: a lack of competition.

Not maximizing competition over ad space is the number one mistake that loses publishers substantial sums of ad revenue. The good news, however, is that there is an effective solution.

Lack of Competition

If you’re a publisher, you’re probably thinking – “Well, that’s not me! I know my ad inventory and we definitely have max competition.”

Unfortunately, it’s not that simple.

Many publishers view their entire website as a single unit, and assume they are achieving leverage between ad networks for higher ad revenue. This holistic view misses blind spots where there is a lack of – or a total absence of – competition.

Okay, now you’re probably thinking – “This might occur with small publishers, but not with top tier publishers like me!”

Well, according to our latest audit of 120 websites, we found that this occurs even with top-tier publishers with millions of monthly pageviews.

In other words, to some extent, most publishers are currently losing money.

The Obvious Example: Display Ad Networks

The most obvious examples of publishers losing out on competition are single ad networks like Google AdSense. But it doesn’t stop there.

Even those using Google Ad Manager (GAM), which enables publishers to connect to multiple ad networks, often do not maximize their competition.

Imagine a premium publisher that is using GAM and is connected to three ad networks: Google Ad Exchange (AdX), Magnite, and Criteo.

That’s good competition between the networks that will drive prices up, right? True, but it can be much better.

First, there are many more quality ad networks that the publisher can access that will increase competition. Just accessing three ad networks, regardless of their size, limits competition off the bat.

Second, in many cases only one network will have relevant coverage for specific placements – especially when the unit is under the fold or the users generate several impressions. This lack of competition also happens when reviewing the same website in a different geographic market or a specific mobile device.

In fact, our detailed analysis revealed that often only one of the active networks would actually bid for the placement with no competition. This clearly means that they will not offer their highest possible price.

Special Ad Placements

Many websites also implement tools for special ad placements – such as mobile sticky units, dynamically placed units and instream video ads. For each of these, the publisher normally implements a tool connected to a single demand source.

The big players prefer to take over the market with as little competition as possible, and some publishers choose this easy path of connecting to only one ad exchange like Sovrn or OpenX.

In the short term, this can work well. But over time, the absence of competition leads to a decline in revenue because the absence of competition allows the demand source to pay less for the ad impressions.

In almost all reviewed cases, when a special ad unit was added outside GAM it was implemented directly on the page without any competition. And these cases are very common.

The Solution for Higher Ad Revenue

By now you’ve probably realized your site lacks competition on some level. In other words, you’re losing potential ad revenue, which no publisher wants! The solution – competition. Simple.

But the truth is that real competition is anything but simple; it requires attention to detail and continuous hard work.

Here are some effective methods for achieving effective competition:

  1. Header bidding – Header Bidding is using a customized wrapper to take competition outside of the GAM and on to the page. This allows many additional demand sources to bid on your ad inventory, before the request is sent to GAM. Header Bidding can be done on the page or on the server (S2S).
  2. Open bidding – Open Bidding is Google’s version of server-to-server bidding. Once the bid comes into GAM there are demand partners that Google allows to bid inside of GAM.
  3. Floor prices – Monetization experts can configure the floor prices on your site to make sure that each advertiser is paying the highest CPM.

Achieving Effective Competition

All of these steps require detailed management on a daily basis. This means accumulating and presenting all results, analyzing the data per placement, identifying areas that lack competition, and then acting to create more competition.

Sometimes tweaking a rule within Google AdX does the job… Sometimes a major code change does… And sometimes what is needed is actually picking up the phone and speaking with an account manager from an ad network.

To turn effective competition into an everyday practice, some publishers look for programmatic advertising specialists. The problem? Such professionals are rare and therefore expensive, making the hire challenging. Also, an analyst who’s great with numbers isn’t necessarily the best person to build relationships with the ad networks. It takes a whole team, not just one person.

Alternatively, you can hire an external team of monetization specialists like ours at Adnimation. Our passion and expertise is helping publishers avoid this common mistake, and thus avoid losing ad revenue.

To learn more, get in touch with our team.

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