How floors work in Index Marketplaces
A floor 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 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.
For fixed-price auctions:
If the highest publisher's floor + fees is lower than the Marketplace Package fixed price, the fixed-price floor is sent to DSPs and the deal 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 | $1.50 fixed-rate CPM | $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 |
|
