Why dynamic allocation makes DFP so good
Ad Publishers now have a bewildering array of ad-servers to choose from. Each offers their own distinct benefits, yet the Small Business edition of DoubleClick For Publishers remains our first choice for virtually every publisher that OKO work with.
The reasons are threefold:
- It is very good (Don’t let the “Small Business” label fool you)
- It is free
- Dynamic allocation
The first two points are not unique and may, or may not persuade you away from the alternatives. However, if you run ads from either AdSense or AdX, dynamic allocation alone might be enough to win you over.
What is dynamic allocation and why it is so good?
Dynamic allocation is the system that DFP uses to communicate with the AdSense and AdX auctions (For simplicity I’ll just refer to AdSense for the rest of the article, but the principals are largely the same for DoubleClick Ad Exchange). Dynamic allocation allows AdSense to compete in real-time to win an impression that would have otherwise gone elsewhere.
This is clearly good for Google, as it gives them a chance to win more impressions. It is good for ad publishers as well, as dynamic allocation will only win the impression if it pays more.
How this works
Dynamic allocation will only compete against non-guaranteed line items. This means that sponsored and standard line items are unaffected. DFP Small Business uses a variant on this, called Enhanced Dynamic Allocation. This additionally allows AdSense to compete against standard priority items that have a fixed impression goal, but it will not do so if that line item is struggling to meet its impression goal.
With dynamic allocation (or enhanced dynamic allocation – consider the names interchangeable for the remainder of the article) enabled DFP will check the highest CPM ad that AdSense can offer for any eligible impression. If AdSense offers a higher price than your non-guaranteed line in DFP then AdSense will serve the impression instead.
This means that setting accurate CPM rates is vital, but get that right and dyanamic allocation can really help push revenue.
Limitations – Dynamic allocation is not a live auction
Although dynamic allocation does allow AdSense to bid in real-time against your sources, they are the only source bidding in real-time. Where other sources provide a fixed CPM this is simple enough. In the case of other sources with dynamic pricing, you will need to set CPMs in DFP based on historic performance.
This gives AdSense and advantage over any other dynamically priced network. To use the real-world auction as an analogy AdSense are effectively bidding against sealed bids from all other buyers.
Dynamic allocation vs first-look and pass back
The alternative to dynamic allocation that many networks will ask for is to give their tags first look on every impression and have them pass-back untaken inventory to AdSense. This is often dressed up a promise to beat AdSense. This approach swings the advantage back to the non-AdSense network who get to cherry-pick the best impressions.
The best approach will depend on the sources involved. A good rule of thumb is to hand the advantage to the source that is most likely to achieve the highest bid most frequently.
How to enable dynamic allocation?
There are two ways to enable dynamic allocation in DFP. One method is open to all, the other needs to be manually enabled on your account.
Inventory level dynamic allocation
The first option is Inventory level dynamic allocation, will be most familiar to DFP publishers and is open to all. This is set on your DFP ad units. Simply select an ad unit from the inventory tab and select Maximize revenue of unsold and remnant inventory with AdSense under AdSense Inventory settings.
You can make this option the default on your account by navigating to Network Settings under the Inventory tab.
Line item level dynamic allocation
This option needs to be manually enabled on your account, so you’ll need to ask your account manager or AdSense Partner to do this. With this option enabled you can create AdSense or AdX line item types and gain much more precise control over when dynamic allocation will compete. This is our preferred method and OKO and the way to enable dynamic allocation of AdX.
Is dynamic allocation (or enhanced dynamic allocation) worth using?
As long as AdSense (or AdX) are a reasonably important part of your ad stack, then the answer has to be yes. Dynamic allocation gives publishers the chance to improve the winning bid on any impression and push advertisers close to their winning bid. Dynamic allocation is usually only a disadvantage in cases where your non-Google programmatic sources are a large part of your revenue. If taking away first-look from one of those sources costs more than dynamic allocation gains then this isn’t a great approach. As-ever, the answer is to test and measure the performance.
Dynamic allocation is just one of the tools that OKO use to help ad publisher earn more. If you would like to learn more about how we might be able to help you why not get in touch today?