{"id":259,"date":"2017-09-22T08:10:12","date_gmt":"2017-09-22T07:10:12","guid":{"rendered":"http:\/\/okodigital.wpengine.com\/?p=259"},"modified":"2017-09-22T08:10:12","modified_gmt":"2017-09-22T07:10:12","slug":"guaranteed-to-beat-adsense","status":"publish","type":"post","link":"https:\/\/cool.co\/supply-side-platform-home\/guaranteed-to-beat-adsense\/","title":{"rendered":"How \u201cguaranteed to beat AdSense\u201d might earn you less than you think"},"content":{"rendered":"

Most successful AdSense<\/a> publishers will have, at some point, been approached by an ad network that guarantees to beat AdSense. The pitch is simple and sounds almost too good to be true: \u201cSwitch your AdSense code for our code and we\u2019ll pay you more than AdSense. If we can\u2019t do that for any ad impression we\u2019ll just show AdSense instead\u201d. How could you possibly lose?<\/p>\n

As Google Certified Publishing Partners<\/a> we encounter this pitch monthly. Although we\u2019re trained and qualified by Google, we\u2019re employed by site owners and our first allegiance is to helping them earn more through advertising. It might be surprising then that we rarely use the networks who make these claims.\u00a0 Whilst there are many situations where adding additional networks into the mix can result in higher yield, this particular sales approach relies on a bit of a three card trick.<\/p>\n

So, where\u2019s the lady?<\/h2>\n

The ruse here is that they are not offering that price on every impression – just the ones that they like the look of. \u00a0A more honest way of wording their pitch would be “We’ll pay you more than your average performance for your very best impressions”, which of course is what every networks does – including AdSense.<\/p>\n

Ad network deals are priced on RPM \u2013 the revenue generated per 1000 impressions. You are probably already familiar with your website RPM by looking at performance reports with the \u2018Ad Requests\u2019 columns selected:<\/p>\n

\"ad<\/p>\n

This is the figure that networks will ask you to look at when setting the price that they promise to beat. All seems above board so far.<\/p>\n

Remember though that the network isn\u2019t promising to beat that price on every impression \u2013 just the ones that they choose. Consider how your average price is made up and this suddenly starts looking like less of a guaranteed win.<\/p>\n

The following report shows the revenue profile for the same site above. The average RPM is just $2.11, but 50% of the impressions are paying over $3.64.\u00a0 More surprising still, advertisers are willing to pay over $6.54 for 20% of the impressions and over $12.15 for 5%.<\/p>\n

\"revenue<\/p>\n

This isn\u2019t an unusual profile for any site. Your average RPM is made up of a range of prices, roughly half of which you probably wouldn\u2019t want to sell for your average.<\/p>\n

A publisher who is aware that their RPM is $2.11 might be very tempted with an offer of (for example) $3.50 on a first-look basis, but the chart above shows that this might not increase their earnings in the way they think and would in fact lose them money on a very significant number of impressions.<\/p>\n

First look?<\/h2>\n

If a publisher replaces AdSense code with another network\u2019s tags then they are giving the network first look at every ad request. This means that the network gets to choose whether or not to serve an ad each time one is requested, and passes that request back to AdSense if they choose not to.<\/p>\n

Now, let me ask a question: If you were a network and could pay a fixed price for any of the ad requests in the chart above would you choose the low value requests to the left, or those worth 6x the average price on the right?<\/p>\n

What happens next?<\/h2>\n

If the highest value requests are sold at a fixed price based on the average, then this can cause 2 immediate problems for the publisher:<\/p>\n

    \n
  1. The fixed rate might not reflect the true value of those ad requests<\/li>\n
  2. The average AdSense RPM will drop without the benefit of the high value requests<\/li>\n<\/ol>\n

    Together these issues can actually cause a drop in earnings. A \u201csharp\u201d network will find this easy to blame on Google as it will be the AdSense rate dropping, but the cause is an undervalued fixed price pushing AdSense returns down.<\/p>\n

    Without the high-value ad requests there is also a risk that the site will be seen by advertisers and the AdSense system to have lower quality traffic \u2013 therefore attracting lower bids and dropping returns further.<\/p>\n

    Does this mean that publishers shouldn\u2019t use other networks?<\/h2>\n

    Not at all. AdSense is so powerful largely because of its ability to monetise every impression through its unbeatable number of advertisers. Across a large inventory I\u2019d back AdSense to perform best against any network, but that doesn\u2019t mean that it will win every impression.<\/p>\n

    The best results can often be achieved by combining networks in way that encourages them to compete on price. Using an ad server (such as the excellent and free Google Ad Manager<\/a>) you can load networks in based on their true performance and challenge AdSense to beat them on a per ad request basis to ensure the highest price for each impression.<\/p>\n

    By replacing AdSense tags with network tags you are offering the network the chance to decide who gets what ad requests. By using an ad server, you are making that choice based on performance metrics.<\/p>\n

    Calculating the true Ad Request RPM<\/h2>\n

    The trick to doing this effectively is to set accurate prices for each network you traffic through AdSense. This should be done based on the per request price that they actually achieve \u2013 not the price they pay for the impressions that they actually choose to serve. After all, even a \u00a3100 CPM is worthless if they take no impressions.<\/p>\n

    If you are passing any unfilled impressions from the network back to AdSense then you also need to factor in the value of that passed back inventory. This is most easily done by sending your pass backs to a separate channel for each network.<\/p>\n

    Actual CPM = (Network revenue + pass back revenue) \/ Google Ad Manager Impressions * 1000<\/p>\n

    Simply add the network as a price priority line item based on that calculation and have an AdSense line item compete against it. Remember to update the actual CPM on a regular basis to ensure that bids are being calculated at the right price \u2013 daily or weekly depending on volume.<\/p>\n

    This seems like hard work<\/h2>\n

    The popularity of AdSense is due in part to its easy \u201cfire and forget\u201d nature. Managing yield from multiple sources isn\u2019t hard with an ad server, but it is a much more involved process than sitting back and allowing AdSense to do all the calculations for you.<\/p>\n

    The potential payoff is the security of broader revenue sources, potentially higher earnings and the ability to respond to opportunities.\u00a0 Of course, if you like the sound of the benefits but not the extra worry and work involved you can always talk to us at OKO Digital.<\/p>\n

    Estimate the revenue potential of ads on your website using our Website Ad Revenue Estimator<\/a>.<\/p><\/blockquote>\n

    This article was originally published here in October 2014, but was last updated and republished August 2019.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Most successful AdSense publishers will have, at some point, been approached by an ad network that guarantees to beat AdSense. 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