As with any publisher, your goal is to maximize ad revenue stemming from all of your ad spaces on your website. To get there, you need to optimize your ad inventory. It is hence essential to sell your ads for the best price possible and utilize all available ad impressions. This article will provide a basic understanding of ad inventory and techniques to determine and manage it more effectively. There are three possible inventory levels:
1. Filled, or 100% fill rate
2. Undersold, or underselling
3. Oversold, or overbooking
The ideal condition is "Filled", or 100% fill rate. This condition is met when you are not undersold and you are not oversold. The boundary between these levels is very close to each other. So, to achieve this level, it is often easier to avoid the other two unwanted conditions rather than trying to find a magic formula for 100% fill rate. Also, it is not easy to continuously maintain a perfect level because of all the changing variables such as: traffic, audience, advertisers, and ad networks. Depending on the complexity of your ad placements, you can use a 2-zone or 3-zone chaining setup. A 3-zone chaining setup has 3 levels: "Premium/Exclusive > Regular > Remnant". 2-zone chaining has 2 levels: "Regular > Remnant". The total available inventory is the total impressions of all the zones in the chain.
Undersold, or underselling, means you have extra impressions that can be sold for more revenue or higher revenue instead of leaving them to non-paying house ads or low-paying ad networks. It is easy to detect if you are in this situation. If there are many impressions served in the Remnant zone, it means there is unsold inventory in the Premium and/or Regular zone. If this is the case, you should try to sell more ads in the Premium/Regular zone to increase your total ad revenue.
Oversold, or overbooking, means you have booked and sold more ads than what is available for the zone. Any individual ad can be booked with multiple restrictions such as specific start/end date, geo-targeting, frequency capping, browser, device, daily/monthly/hourly quota, even distribution, etc. These restrictions break up the total available inventory into many smaller overlapping segments. It can be difficult to determine the exact number of impressions in each of these segments. For example: consider an ad placement that has one million total impressions for April. 50% of that is US visitors. 70% of those US visitors use Windows. One of the ads is booked into that placement from March 15 to April 20 targeting US and Canada visitors with a total limit of 50,000 impressions and an even distribution. Another ad from April 10 to April 20 targeting visitors within 50 miles of Chicago and a total limit of 100,000 impressions.
However, there is a way to determine if a specific ad is overbooked by looking at its weight/priority setting and its delivery progress. If an ad has Auto Priority at the maximum value for an extended period of time and its delivery progress is behind schedule then it is likely overbooked. Check with your tool on how to find this.
Another simple way to avoid overselling is allowing a small amount of inventory to be undersold. This means you initially allow some impressions in the Remnant zone, which contains in-house ads and/or low-paying ad networks. As you monitor the number of impressions number in the Remnant zone, you know how many extra impressions you can sell in the Premium/Regular zone. The goal is to monitor and reduce these extra impressions to a level with very little extra impressions left. This is a safe and simple way to avoid overselling.
As a final note, your ad inventory changes every day so it is a good habit to monitor the ad inventory reports and make any necessary changes promptly.
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