Best Practices: How high price floors can limit your revenue

Monday, June 11, 2012
By: Jim Payne

Our publishers love the tools and transparency that we provide them through the MoPub Marketplace (read why you should activate MoPub Marketplace today if you haven’t already). One of the most powerful features is the ability to set the minimum acceptable CPM (formerly known as the “price floor” in our UI) at an ad unit level. The minimum acceptable CPM is the lowest possible price at which a bidder can win an impression on MoPub Marketplace.

There isn’t a perfect science to setting your minimum acceptable CPM and setting too high of a price may actually hurt your ability to earn additional revenues, particularly when you launch new applications on MoPub Marketplace. Following these best practices, however, will ensure that you aren’t missing out on possible revenue.

When you first activate MoPub Marketplace , we highly recommend that you set the minimum acceptable CPM to $0.05. Your inventory is new to our demand partners and this allows them to understand your applications’ performance without being discouraged from bidding by a high minimum CPM. After you have MoPub Marketplace live for at least two weeks, you should ask yourself: “What is the lowest amount I am willing to be paid for an impression?” and set the minimum acceptable CPM to that price. Remember that the minimum acceptable CPM isn’t necessarily the price you will be earning through MoPub Marketplace. As your inventory conversion rates become more familiar to bidders, driving up competition for your impressions, your CPMs will likely increase as well.

For example:
If you set the minimum acceptable CPM at $0.55 and a bidder in MoPub Marketplace is willing to pay $0.54, the bid will be rejected and you’ll lose that revenue opportunity at a decent CPM. The impression request could then either go to an ad network at a CPM below $0.55 or go unfilled entirely, all because your minimum acceptable CPM was set too high.

Setting your minimum acceptable CPM at the lowest extreme that you would be willing to accept will ensure that you won’t lose out on future ad revenue.

Our team will continue to keep you updated with our best practices. Interested in learning something specific? Your feedback is always welcome. Email us at marketing@www.mopub.com .

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