The Programmatic Glossary
A practical glossary designed to help marketers, advertisers and ad-tech professionals understand the terminology that powers programmatic advertising
Programmatic
Bid Floor
The minimum price a publisher is willing to accept for an ad impression. Any bid that comes in below this price is automatically rejected. The publisher would rather not fill the slot than sell it too cheaply.
HOW IT WORKS
Publishers set floor prices either globally or at a granular level (by geography, device type, ad format, time of day or audience segment). When an auction runs, bids below the floor are excluded. The floor is usually set based on the publisher's CPM (Cost Per Mille) targets and historical bid data.
EXAMPLE
A publisher sets a $2.00 floor price for their homepage banner. Three bids come in: $1.50, $1.80 and $2.40 The first two are rejected; the $2.40 bid wins. Without the floor, the $1.50 bid might have won, costing the publisher $2.40 worth of value.
RELATED TERMS
First-price auction | Dynamic floor pricing | CPM | Yield optimisation | Bid density
★ LIMELIGHT INSIGHT: Limelight's ARC toolkit enables dynamic floor pricing automatically adjusting floors in real time based on demand signals, time of day and historical performance to maximise revenue.
