Revenue Optimization

Yield Management: A Starter Guide for Publishers | 2019 Edition

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What is Yield Management

23 out of 25 resources on yield management which I read in the last 10 days had this one common statement ー publishers dream of performing effective yield management, but somehow they’re unable to. Why?

Because yield management, particularly in ad tech, is considered a more complex technique than many other optimization methods out there. Sometimes it’s also called revenue management due it direct relation with pricing. (you got a heads up here)

Like any other optimization technique that publishers deploy, yield management is exercised to drive increase in revenue. However the major difference is, unlike other techniques, yield management works considerably well if done right.

If we get into defining ‘what is yield management?’ you might feel confusion at first. So here with this guide, I try to jot down all the things you need to know, in the simplest way possible.

So, What Is Yield Management?

If you’re someone who flies and checks in hotels occasionally, you must have observed prices varying every hour. In case of cabs, you must have seen surge pricing. The reason for this dynamic pricing is to sell at best prices based on market demand.

Similarly, yield management enables publishers to sell ad inventories by structuring a variable pricing strategy. The system of yield management for publishers enables

  1. formulation of pricing strategy based on consumer behavior and demand predictions
  2. allocation of different pricing on different demand sources and demand time/season
  3. possibilities of highest prices/CPMs and max fill rate

Yield management and yield optimization may appear daunting at first. But it isn’t difficult to get started once you have the the right strategy in place. Here you go:

Stage #1: Get In Action With These Channels

First things first. Before getting into best practices or strategies to leverage yield management, it’s necessary to at least have a roadmapーwhere and how to do yield management…

  1. Real-time Bidding: RTB helps you sell your ad inventory to buyers in real-time. In relation to yield management, it helps you determine the highest margin and maximize your profits from remnant (also premium) inventories.
  2. Programmatic Direct: This method lets you directly deal and negotiate with buyers. Here, publishers get the benefit of automated negotiation and sales of their direct-sold inventory with the intent to driving in highest CPMs.
  3. Private Marketplace: This is an invite-only marketplace where high-caliber publishers pick advertisers they’d want to sell inventories to. Here, the transactional environment is limited, but the scope of customization in inventory packaging in wider.

Stage #2: Execute The Yield Management Must-haves

Being a publisher, I’m sure you aim to clear stocks of your inventory in the most lucrative manner; instead of settling for average revenue. Here are the must-have techniques to optimize ad yield:

  1. Header Bidding: This technique helps you offer your inventory to multiple demand platforms at once. It helps you realize the real value of inventory favoring better, instantaneous yield. (also acts as a practical alternative to the ‘publisher waterfall’).
  2. Google Ad Exchange: AdX allows you to connect with multiple demand sources. The intent is to increase competition around impressions, get more demand for these impressions (your inventory), and hence ensure better yield.
  3. Native Ads: These ads blend in with the content published on the publisher’s website. Consequently, advertisers get better RoI because of  improved visibility of their ads/content in the editorial feed, and the publisher generates greater revenue.
  4. Direct Deals: As the term ‘direct’ suggests, this sort of dealing empowers inventory-seekers to directly buy from you. Since there are no middlemen involved in the dealing, you get entitled to higher revenue than.

Stage #3: Optimize Your Website And Inventory Style

Start with some basic playing around with your website for starters like using proven ad styles. Sizes viz. 729×90, 300, 250, and 300×600 are the most effective ones on desktop. Similarly, sizes like 160×600 might work wonders on mobile.

Experimenting with the orientation of text ads lies in your hands (not the advertiser who creates ad designs). Try and see which appearance works the best for you ー blend mode or contrast.

Because you’re experimenting, you can always test what works and looks the best in ad placement. Some common performance optimization A/B tests are Above the fold vs below the fold, left hand side vs right hand side, and page vs no page.

Yield management factors in demand-time i.e. the time or season you know creates more demand. Therefore, it’s a great practice for you to go in theme of the time/season you’re prepping to monetize.

If you have a responsive website serving mobile-friendly ads, you can conduct the same experiments accordingly and leverage mobile monetization. And, if you still haven’t gone responsive yet, it’s time to pull up your socks.

Stage #4: Make Yield Management Work For Mobile

Stats say that 52.2% of the worldwide online traffic came through mobile phones in 2018.

This just proves, mobile is the new thing! Owing to the fact how much mobile traffic and mobile advertising is flourishing, yield management in mobile has already geared in acceleration. The purpose is to target the right user with the right ad. And of course with the timing right

So how do you make yield management work for mobile? With a DMP.

A DMP aka data management platform helps publishers manage audiences. They ensure that only well targeted ads are displayed to mobile users.

Whether on-site or in-app, mobile advertising yield management lets increase ad engagement, hence maximizing your yield/revenue. But this is not just it. There’s a plethora of factors, ideas, and strategies which help structure a competent mobile advertising yield management strategy.

Challenges Publishers Encounter In Yield Management

The pathway to performing yield management and yield optimization may feel bumpy at times. Here’re some challenges publishers often face:

  1. Since RTB is an evolving process, yield managers are never done with assessing their inventory. Consequently, formulating a floor pricing strategy gets tricky sometimes.
  2. Publishers also often reach a point of standstill where the yield management system becomes multidisciplinary. So to keep going, publishers have to cater to multiple verticals viz. rate management, revenue stream management, and distribution channel management.
  3. Yield management strategies also require characteristics of marketing, operations, and finance (better if you have experts in your team). Therefore it leads to creating interdepartmental dependency.

How To Optimize Your Yield Management Efforts

As we drive towards the finishing point of carrying yield management, let’s pull the break with some quick improvement pointers. So make sure you:

  1. follow real data i.e. genuine count of CPMs and data volume from different sources.
  2. increase and fine-tune your demand sources to increase bid competition.
  3. have a bid strategy ready beforehand (before you start with yield management).

By having this stage-by-stage guide in place, you should get some idea and motivation. The steps cited above should help you to start articulating your yield management strategy.

Above all, I’m not saying this guide has made you all set to start right away, but hopefully it managed to at least get up and running.

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