What is a bid floor, and how should I set it?
A bid floor is the minimum CPM price a publisher will accept to sell an ad impression in an auction. Set dynamic bid floors based on historical fill rates, geo tiers, and ad formats. Setting floors too high causes unfilled impressions, while setting floors too low risks leaving buyer surplus on the table.
Detailed Explanation
When a publisher exposes an ad slot to programmatic buyers, they can declare a reserve price (bid floor) in the OpenRTB request. If an advertiser's DSP submits a bid of $1.80 CPM, but the publisher floor is $2.00 CPM, the bid is rejected.
Setting bid floors requires balancing two opposing metrics: eCPM (price per 1,000 sold impressions) and Fill Rate (the percentage of total ad requests that get sold). Total revenue is `eCPM × Fill Rate × Total Requests`.
If you set an aggressive $5.00 floor, your eCPM will appear high, but your fill rate might drop from 90% to 15%, causing your overall revenue to collapse. Sophisticated publishers use dynamic floors that adjust by device, geography, and time of day.
A hard floor rejects any bid below the minimum CPM; a soft floor allows bids below the threshold to enter a second-stage auction if no bids exceed the primary price target.
Optimizing Publisher Yield: High Floor vs Dynamic Floor
A publisher receives 100,000 daily ad requests.
Yield optimization requires maximizing total cleared revenue, not headline eCPM.
What to Do Next
- 1Segment your bid floors by country: Tier 1 countries (US, UK) can support higher floors than Tier 3 markets.
- 2Test floor changes on a 10% traffic slice before applying them globally across your ad inventory.
- 3Monitor fill rate closely after any price floor increase.
Related Questions
Break-Even Bid Calculator
See the advertiser's side: how buyers calculate their maximum allowable bids.