How floors work in Index Marketplaces
A floor
A pricing control used by media owners and exchanges to set a minimum sale price on inventory. is a predefined minimum acceptable price for a winning bid for a piece of inventory. When a floor is
set, Index Exchange (Index) only accepts bid
responses from DSPs that meet or exceed that price, and rejects those that fall below it. Rejected bids that did
not clear the floor price are shown as "bid below floor" in reports. The minimum floor price that you can set on
a Marketplace Package is
$0.10.
To make sure that
Media Owners earn their
intended minimum revenue for
Marketplace transactions,
both Marketplace fees and
Vendor fees (for example, a segment fee) must be factored
in when determining the floor price that Index passes
to DSPs. To do this, Index takes the highest
publisher The owner of a website or app where advertisements are served. floor and adds applicable
Marketplace fees and
Vendor fees to it. Index then compares the
Media Owner's highest
floor value + fees to the
Marketplace Package
floor and applies the following logic:
For first-price auctions, whichever floor is highest between the highest publisher's floor + fees and the Marketplace Package floor is sent to the DSP
Demand-Side Platform (DSP). A software platform that automates bidding decisions in real-time and efficiently connects buyers and audiences through an ad exchange or SSP. Also known as a buy-side platform..
For fixed-price auctions:
If the highest publisher's floor + fees is lower than the Marketplace Package fixed price
For specific deals, a fixed price can be negotiated between a publisher and a buyer. If the advertisers bid at this fixed price or above, their bid responses are eligible to compete in the auction, and, if they win the auction, they only pay the fixed price regardless of what their bid amount was., the fixed-price floor is sent to DSPs and the deal A private auction that allows media owners to offer specific inventory directly to selected buyers identified by a deal ID. Terms are negotiated and are agreed upon before the auction occurs. can transact.
If the highest publisher's floor + fees is higher than the Marketplace Package fixed-price, the deal is considered ineligible to transact.
First-price auction example
To figure out which floor to pass, we must compare (highest publisher floor + marketplaces fees) to the Marketplace Package floor, and send the highest value to the DSP.
| Highest publisher floor | Marketplace fees | Marketplace Package floor | Calculation | Floor sent to DSPs |
|---|---|---|---|---|
$5.00 | 10% | $4.00 | ($5.00 / (1 - 10%) = $5.56) compared to $4.00 | the Media Owner's floor + fees is highest, so DSPs are sent a floor price of $5.56. |
$2.00 | 15% | $5.00 | ($2.00 / (1 - 15%) = $2.35) compared to $5.00 | The Marketplace Package floor is highest, so DSPs are sent a floor price of $5.00. |
$5.00 | $4.00 | ($5.00 + $1.50 = $6.50) compared to $4.00 | the Media Owner's floor + fees is highest, so DSPs are sent a floor price of $6.50. | |
$2.00 | $0.50 fixed-rate CPM | $5.00 | ($2.00 + $0.50 = $2.50) compared to $5.00 | The Marketplace Package floor is highest, so DSPs are sent a floor price of $5.00. |
First-price auction example with vendor fee
| Highest publisher floor | Marketplace fees | Marketplace Vendor fee | Marketplace Package floor | Calculation | Floor sent to DSPs |
|---|---|---|---|---|---|
$5.00 | 10% | $1.00 | $4.00 | ($5.00 + $1.00) / (1 - 10%) = $6.67 compared to $4.00 | the Media Owner's floor + fees is highest, so DSPs are sent a floor price of $6.67. |
$2.00 | $1.50 fixed-rate CPM | $1.00 | $5.00 | $2.00 + $1.00 + $1.50 = $4.50 compared to $5.00 | The Marketplace Package floor is highest, so DSPs are sent a floor price of $5.00. |
Fixed-price auction example
If a Marketplace Package has a fixed price, we send the Marketplace Package fixed floor price to DSPs, but only if it is higher than the highest publisher floor + fees.
| Highest publisher floor | Marketplace fees | Marketplace Package fixed floor price | Calculation | Will the deal transact? |
|---|---|---|---|---|
$5.00 | 10% | $4.00 | ($5.00 / (1 - 10%) = $5.56 compared to $4.00 |
|
$2.00 | 15% | $5.00 | ($2.00 / (1 - 15%) = $2.35 compared to $5.00 |
|
$5.00 | $1.50 fixed-rate CPM | $4.00 | ($5.00 + $1.50 = $6.50 compared to $4.00 |
|
$2.00 | $0.50 fixed-rate CPM | $5.00 | ($2.00 + $0.50 = $2.50) compared to $5.00 |
|
No, because the
Media Owner's
highest floor + fees is higher than the
Marketplace Package
fixed floor price.
Yes, because the
Marketplace Package
fixed floor price is higher than the
Media Owner's
highest floor + fees.
Fixed price example with vendor fees
| Highest publisher floor | Marketplace fees | Marketplace Vendor Fee | Marketplace Package fixed floor price | Calculation | Will the deal transact? |
|---|---|---|---|---|---|
$5.00 | 10% | $1.00 | $4.00 | ($5.00 + $1.00) / (1 - 10%) = $6.67 compared to $4.00 |
|
$2.00 | 15% | $1.00 | $5.00 | ($2.00 + $1.00) / (1 - 15%) = $3.53 compared to $5.00 |
|
