Total digital display advertising spend is expected to hit $389 billion in 2021, an increase of 17% from 2020. Despite the pandemic, digital ad spend continues to grow, and is projected to exceed $500 billion by 2024.
This represents a lot of potential revenue for Media Publishers, but it also reveals one of their greatest challenges: Yield Optimization.
What is Yield Optimization?
Yield optimization is the practice of using data analysis and optimization techniques to increase performance and revenue. In short, it is a strategy used to maximize the value of digital advertising.
Advertisers are always trying to achieve the highest yield for their ad impressions. While small ad publishers can test a variety of strategies prior to scaling, as the brand grows, managing and optimizing advertising yield becomes increasingly complex.
For publishers, yield optimization can involve the analysis of existing data to determine which areas of inventory are performing well, and which are not. Publishers can mobilize the practice of yield optimization to understand the elements or circumstances of these areas and exploit them to maximize efficiency.
With the escalating amount of different data points available, many advertisers may resort to outsourcing when it comes to yield optimization, while others hire an in-house team to manage operations and inventory.
What is Yield Management?
Yield management is a variable pricing strategy that allows ad publishers to sell their ad inventories at best prices. These pricing strategies allow publishers to change prices based on user behavior and demand projections. Prices are also altered on the basis of demand seasonality as well as depending on the sources of the demand. Yield management results in creating an opportunity for highest prices of CPM along with maximum fill rate.
Yield management and yield optimization may appear daunting at first, but with the right strategy in place, it’s easy to get started. There are a multitude of effective strategies that ad publishers as well as brands can use for yield optimization, depending on overall marketing strategy, industry and a variety of other factors. Although there’s a lot to learn about yield optimization, let’s get started with some basic yield management and optimization tips.
Where to Do Yield Management
You can use the following three methods for yield management:
Real-time bidding allows you to sell ad inventory to buyers in real-time. It helps you determine the highest margin and maximize your profits from remnant inventories.
3. Private marketplace
The private marketplace (PMP) is an invite-only marketplace where advertising is bought and sold programmatically between exclusive parties. PMP advertising allows publishers to invite advertisers of their choice and organize a real-time private auction of their ad inventory.
Yield optimization best practices
Before you dive into any advanced yield management and optimization strategies, you first need to develop an understanding of basic yield optimization. This will allow advertisers to capitalize on their advertising spend by deploying a few simple measures.
1. Optimize your website and inventory
This could be especially impactful during seasonal events like Christmas, Black Friday or St. Patrick’s Day, although you’ll want to test out your strategy much in advance for a big event launch.
Changing your website in the right way can increase engagement enabling advertisers to get more conversions from ad impressions. Also keep an eye on the range of metrics related to visitor experience such as exit pages, average time spent on the website, and bounce rate.
2. Adhere to AdSense rules and regulations
Always adhere to AdSense rules and regulations. Violations can lead to a downtime which advertisers don’t want. Moreover, use ad sizes that have been proven to output the highest yields for different screen sizes. For instance, the ideal ad sizes for PCs are 300×250, 728×90, 160×600, and 336×280. Remember targeting and placement also influence the yield.
3. Understand key metrics
Have a solid understanding of different metrics and their acronyms such as CPM (cost per mille/thousand), RPM (revenue per thousand impressions), CPC (cost per click), and CTR (click through rate). This will enable businesses as well as ad publishers to monitor and evaluate the performance of their ads and produce actionable reports for enhanced decision-making.
Play with the textual ads and use different colors to observe which combination provides the best yield. It depends on the target audience and can only be determined through rigorous testing. Find a combination that’s the best yield optimizer.
How to Start Yield Optimization
Publishers can use the following techniques to start optimizing ad yield:
1. Header bidding
Header bidding, also known as pre-bid, is an advanced programmatic technique that allows you to offer your inventory to multiple demand platforms at once. The idea is by letting multiple demand sources bid on the same ad inventory at the same time, publishers realize the real value of inventory and increase their yield.
2. Google AdX
Through Google AdX, publishers can sell their ad inventory to advertisers and agencies using real-time bidding technology. Connecting with multiple demand sources allows you to increase competition around impressions, get more demand for your inventory, and thus ensure better yield.
3. Native advertising
Native ads blend in with the content published on the publisher’s website. As a result, advertisers get better ROI because of improved visibility, and publishers generate more revenue.
4. Direct deals
Direct deals allow inventory-seekers to buy directly from publishers. With direct deals, the publisher owns any audience data and decides when the ad server should deliver the impression.
Advanced Yield Optimization and Management Methods
As advertisers need to further scale their business, it becomes increasingly complex to manage and optimize inventory yield. That’s where advanced yield optimization and management strategies can come in quite handy.
1. Relying on an ad server
If an advertiser is going for effective optimization that can be implemented on a large scale, a dedicated ad server is crucial. It enables publishers to specify their bidding priorities along with the capability of serving ads based on different criteria, including geographical location, day and time, devices and more.
2. Capping frequency and geo-targeting
Ask the ad representative which geographical locations are performance leaders and then target those regions. Publishers can also request a separate tag based on their own particular targeting metrics including region, especially if the ad representative doesn’t offer comprehensive reporting. Moreover, publishers have the option to use frequency capping for ad networks that aren’t filling 100%. This restricts the bid frequency and limits pass backs.
3. Prioritize ad targeting based on metrics
In order for yield optimization to work effectively, publishers must know which metric means the most to their strategy. This allows them to plan out their ad inventory and how to target it. It can be categorized into different tiers including devices, regions, and more. This gives publishers more granular control over yield management by enabling them to rank the bids in accordance with the metrics.
4. Pick bigger ads and give unconventional ads a try
Unless there’s an advertiser willing to pay a good price for a small ad as well, it’s better to only go with the bigger size ad as it will limit your costs while increasing chances of conversion. Publishers will generally pay higher CPMs for bigger ads and mobile ads aren’t any exception. Apart from this, publishers can try different types of non-standard ads including sliders, carousels and anchors.
5. Deploy header bidding and use CPM floors
Header bidding has been tried and tested to enhance yield by more than 45%. There are no pass backs to monitor which cuts down the amount of resources needed to run ads. Also set a minimum acceptable price for an ad placement to get rid of low paying ads. Test to identify where the CPM floor is as it’s a crucial part of ad yield optimization.
6. Make yield management work for mobile
Since more than 50% of a website’s traffic comes from mobile devices, it pays to ensure yield optimization for mobile inventory as well. Some basics that can be done to increase revenue include:
A. Fast and responsive site
Ensure the website is responsive and all the data including media loads quickly and in accordance with the screen size. A site or a page that doesn’t show contents clearly will directly lead to loss of revenue. When optimizing a new site for tablets to target ad inventory, treat them as desktop computers.
B. Sign up to a mobile ad network
It can be quite useful to sign up with mobile ad networks as they provide access to mobile inventory. These networks make large mobile advertisers and ad publishers accessible. Since the ad campaigns are mobile-oriented, they also offer better rates which can boost revenue.
C. Choose mobile-friendly ad formats
Mobile users generally love to scroll and that’s why 300×250 below the fold ads can do well on a site. Test them and analyze engagement to ensure they are performing well and attracting engagement. Another way to maximize site revenue is to go for in-banner video ads which pay better than display ads. Ensure that loading times aren’t compromised when managing inventory of video ads.
Yield optimization is a necessary initiative to ensure the space publishers dedicate to ads on their website is generating maximum revenue. For small businesses, it’s easy to manage and optimize ads, however, as businesses scale their ad inventory and work across different websites and pages, it becomes increasingly challenging to keep up with ad management.
That’s where the yield optimization methods and techniques mentioned in this article can be implemented to ensure that ads are not only placed well, but fetch the highest amount of revenue for your business without compromising user experience.