What is yield management ?

Overview- Yield Management

The amount of inventory on any site is nearly steady but the demand for these inventories may vary. With this metric, the aim is to sell all of the inventories on the site at the highest prices. Selling all the inventories at all times is one of the major problems for many publishers and this can be solved by yield management strategy. Yield management is an extremely technical process and thus it is more of a dream for many publishers as it is really difficult for them to foretell the demands and manage inventory accordingly. One can maximize yield only by allocating inventories in the areas where the demand seem to be highest.

The process of increasing revenue in the course of execution of inventory control and pricing strategy is termed as Programmatic ad yield management. The majority of Publishers are now comfortable and adapted to this process in some form, particularly in programmatic conduit. If a publisher is looking to effectively en-cash their offerings, the best popular solution is the yield management.

With the new innovations and trends in the digital world, the advertising landscape is getting more and more complex hitting the publisher side of the market. Although the added complexity is an excellent thing for sellers as they can make a relevant and alluring offering to advertisers, at the same time it can also make the revenue management side of the things a little harder.

When we talk of revenue optimization, an area that’s rapidly picking up steam is “Holistic Yield Management” where in efforts are made based on data analysis to ensure the right mix of direct sales, PMP and programmatic ad sales is done to ensure both sustenance of long term relationships with buyers and increase in advertising revenues. It is the exercise of maximizing the revenue taken as a whole. It is now not at all about optimizing the revenue of any one channel, whether it is direct, or a single platform contained by the ad stack similar to the primary SSP or programmatic PMPs. Conversely, publishers must connect the complexities of the new promotion landscape and handle yield from corner to corner of their entire advertising business.

Publishers need to logically identify the “restrictions” that could have a positive impact on their business and can and that generate nominal opportunity costs. This thought of “contained action” is the answer. Though the Holistic yield management sounds a bit complicated, is not unworkable, if approached in a top-down style, attempting to revise your inventory and pricing scheme as a whole to produce the maximum revenue.

Owing to underrate inventory (i.e the inventory sold at extremely low CPM) and poor yield management, many publishers face profit issues. Best way to reduce this profit issue is to combine all the revenue blocks in one view. Thinking of revenue from a single sources either audience or only inventory does not get you enough profits. But if audience and inventory are packaged together for the business, you are about to achieve the maximum returns.

Yield optimisation is to make every impression countable. In order to maximize yield monetization, there are three important channels namely, Private marketplaces (PMP), Real Time Bidding (RTB) and Programmatic direct.

RTB a very important component of advertising which creates a bidding environment so that advertisers can bid on different ads in real time to be shown to specific users. RTB is considered the best for publishers to increase revenue stream as it places the right ads to the right user at the right time.

Benefits of RTB:

– Real-time selling of ad space to the highest paying buyers
– Maximized profits from premium and leftover inventories
– Assists in realizing higher margins
– Provides detailed reports of the inventories

Using the RTB marketplace, publisher partners can choose the buyers to bid on inventory.

Private Marketplace – It allows publishers to sell their premium inventory in a limited environment, while still achieving efficient revenues. Based on the target audience, the inventory packages can be customised and combined together for the demand side platforms.

Programmatic Direct – Yield optimisation method helps publishers to monetize their unsold inventory by dealing with demand platforms, SSPs, Ad Networks, and Exchanges. Publishers often work in an environment where the supply doesn’t reach the specific demand audience. Programmatic direct is the newest advertising model that identifies the premium target audience for the specific ad campaigns. This is a long-term approach for publishers for better yield management. Some of the benefits of programmatic to publishers are:

– Helps in efficiently controlling the unsold inventories
– Provide better audience segmentation
– Assist in delivering relevant content to the specific audience
– Targeting the premium audience other than on publisher’s site
– Optimizing content
– Let maximum CPM rates for scarcely identified audience

Out of the above three optimisation channels, Programmatic is the one that hugely benefits the publishers in yielding maximum revenues. Programmatic approach is more like a private auction for publishers wherein they can make available the top priority bids only to the premium buyers for specific inventory. One of the examples of a programmatic deal allowing private auction is Double Click AdX by Google. Such private auctions define particular CPM floor prices for premium ads and impressions and also assist in streamlining the operations through programmatic platforms.

Programmatic advertising strategy confines higher CPMs than the unsure RTB

The best yield management strategies for yield management are as listed:

Call it Pre-bidding or advanced bidding or Header Bidding, it is one of the most sought after bidding processes created to increase the monetization of impressions. Header bidding allows publishers and the ad networks to connect with various demand platforms and calculate the real value of their inventory. This process takes place just before the real bidding and if it is does well, can yield instantaneous ad results and delivery. Header Bidding is implemented by publishers and website owners by wrapping a specific tag in website header. This allows the demand side to accept bids before the SSP request. Thus, there are two main advantages of Header Bidding:
– It promotes transparency in bid value
– Remove the waterfall approach to access inventory groups

With these benefits, there are also the disadvantages of Header Bidding:

– Huge set-up cost
– Website load time
– Managing multiple user interfaces without a centralized control.
– Difficult to get combined monetization report

You can get the simplified yield management by utilizing Ad Exchange (a platform by Google). This platform allows publishers to connect with multiple ad networks thereby helping in achieving the increase in competition around the impressions. The more access a publisher gets to demands, the higher is the yield. Being the only exchange that offers the access to the demands of users, this platform permit publishers to sell their inventories to numerous demand partners. It also offers publishers to capture the opportunities for better decision making. It helps them to know as to how the advertisers, ad networks, DSP etc are bidding and buying their inventories and provides full control and protection of their inventories.

Native Advertisements are yet another yield management strategy. As these ads provide the exact look and feel as per the publisher content, it allows effective ad experience for the users. As the native ad content fits in with the publisher’s website content, the advertisers can promote their content in the editorial feed without hindering the user experience. Here the advertisers get paid for their content for the increased visibility while the publishers generate revenue out of their websites.

Affiliate or Direct Marketing Strategy can be yet another tool to effective yield management.The direct strategy allows the companies to directly approach publishers instead of an ad network in order to avoid competition. This direct deal pays a higher price to the publisher as there are no middlemen known as Ad Network to process the ads. Also, as the website audience is specific and targeted, it becomes easy for the companies to achieve greater viewability of ads which in turn drives revenue. While the direct marketing strategy yield direct and higher profits for publishers, the affiliate marketing provides the publishers with a portion or commission from the leads that convert into sales for a company, achieved by the advertisement published on the website.

Conclusion
In this epoch of direct sales channels, private marketplaces and programmatic sales all in full sway, maintaining yield across all channels from perspective of holistic, page-wide revenue can be a discouraging job.

To get deep into the Yield Management, publishers ought to consider their yield management “behaviour” based on:

– Impressions management
– Impressions mechanics
– Sales management
– Partnership management with demand partners
– Data operations

As the programmatic network has advanced and evolved, publishers have matured their yield management offering to keep shoulder to shoulder with the market, assisting clients in providing great well- informed services and most essentially the best per-page yield.

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