Yield Optimization: Dynamic Pricing

Common to auctions, a price floor or reserve price is the minimum amount that a seller will accept as the winning bid.

Price floors are used in the Auction, and can be managed in real time to drive growth or to ensure holistic site profitability with minimal risk.

Publishers can control price floors in two ways:

As an explicit value, set by the publisher on each winning ads call.
As a configuration in the Koddi system based on dimensions added in the winning ads call.

If neither of these options are utilized, the program price floor will continue to be used for all auctions.

All functionality is controlled by the “yield_management” object within the winning ads call, documented here

Publisher Defined Price Floor Setting

As a marketplace, You’re able to set a dynamic price floor on any given auction call through the winning ads call.

To set an explicit price floor, include the intended value in the “price_floor” object nested in the “yield_management” object in the winning ads call.

Value must be a number, with maximum 2 decimals
Values are interpreted in the Client’s configured currency (default USD)
Unrecognized values will result in a warning, but not a failure, with the price floor defaulting to the next priority price floor setting (see below).

Segmented Price Floor Setting

As a marketplace, you’re able to rely on the Koddi team to configure the price floor based on segments passed in the winning ads calls.

Any segment that will be used to configure dynamic price floors should be included as an array in the "attributes" object nested in the “yield_management” object in the winning ads calls.
Your Koddi Programs team can configure price floors based on any combination of values that are included here.

Logical Order of Operations

For any given auction, the price floor will be determined based on the following priority of the implementation methods:

Publisher defined price floor setting
Segmented price floor settings
Program default price floor setting

Koddi Recommendations

Use a test and learn approach.
Cater your strategy to your program's growth phase. New programs and markets may use lower price floors to drive high returns, while mature programs can optimize for increased yield.
Once business logic is determined, Koddi can assist in evaluating the impact to the existing bidder set prior to launching the feature.
In order to maintain auction transparency without creating whiplash, market pricing changes should be communicated to advertisers once they become policy. Testing different pricing to improve yield or frequently fluctuating pricing should be communicated more broadly over time as part of “how it works” language.