Applying discounts for buyers

Volume Incentives for buyers is a program where eligible buyers can get discounts on the final payment owing for an impression. This discount is applied without impacting the publisher's revenue share for a given transaction or the buyer's bid price.

Index Exchange (Index) negotiates a series of discount rates with an eligible buyer based on certain ad spend tiers, with discounts increasing as the buyer reaches higher ad spend tiers. With Volume Incentives, buyers can achieve more savings as they spend more with Index, and publishers benefit from this overall increase in ad spend.

Note: Volume Incentives for buyers program is only available to select buyers. For more information about this program, contact your Index Representative.

How Volume Incentives for buyers works in an auction

If a buyer is eligible to receive a Volume Incentives discount (for example, 2%) for a winning impression, the buyer will receive a discount off of the winning bid price. The Volume Incentives discount is always calculated after the auction is complete and the discount that buyer receive results in Index taking a lower fee for a transaction.

Example

To understand how Volume Incentives works in an auction, review the workflow example below:

Buyer A wins an auction with Publisher X at the final bid price of $10.00 (CPM). This amount is known as the gross bid (price before Index fee).

Since Buyer A is eligible to receive a 2% Volume Incentives discount for this impression, the buyer gets a 2% discount off of $10.00 = $0.20. Buyer A owes Index $10.00 - 0.20 = $9.80.

Publisher X has a revenue share of 80%. Index pays Publisher X 80% of $10.00 = $8.00. Index takes a lower fee for this transaction since Buyer A received $0.20 in savings. So Index's fee for this transaction is ($10.00 x 0.20) - $0.20 = $1.80.

Note: Publishers will always receive the revenue share for a transaction based on the final bid price, and not the discounted price that the buyer pays.

In summary, Buyer A won the auction at $10.00, but only had to pay $9.80 for it because they had a Volume Incentives discount applied. The publisher still gets paid their revenue share based on the winning bid price of $10.00, and Index takes a lower fee by subtracting the buyer savings from our fee ($2.00 - $0.20 = $1.80).

Review the table below to see examples of impressions competing in an auction with and without Volume Incentives for buyers applied.

  Without Volume Incentives With Volume Incentives

Buyer bid price

$10.00

$10.00

Volume Incentives discount

N/A 2%

Buyer fee savings

N/A $0.20
Buyer owes $10.00 $9.80

Index fee

20% of $10.00 = $2.00 20% of $10.00 - 2% discount = $1.80
Publisher revenue $10.00 - 20% Index fee = $8.00 $10.00 - 20% Index fee = $8.00

How Volume Incentives discounts get applied

To make sure that Index is able to earn a minimum fee for every transaction, Index compares the following values:

  • Global take rate floor: The minimum Index fee that we must earn for any given transaction. Global take rate floors will differ based on transaction type: open market, private market, and Inventory Packages.

  • Index fee: The fee percentage that Index negotiates with each publisher and charges for a transaction.

  • Volume Incentives discount: The discount percentage that Index negotiates with eligible buyers to receive for a transaction that is given after the auction occurs, and does not impact the publisher revenue share or the buyer's bid price.

For more information on how Index compares these values to determine how a Volume Incentives discount gets applied, refer to the table below.

When does Volume Incentives discount get applied? Example

A Volume Incentives discount gets fully applied if it meets all of the following criteria:

  • Index fee is greater than the global take rate floor.

  • When you subtract the global take rate floor from the Index fee, this value is greater than or equal to the Volume Incentives discount.

Index's fee: 10%

Global take rate floor: 8%

Volume Incentives discount: 2%

Result: 

  • Index's fee of 10% is greater than the global take rate floor of 8%.

  • When you subtract the global take rate floor from Index's fee (10%-8%= 2%), this value is equal to the Volume Incentives discount of 2%.

  • The full 2% discount gets applied in this scenario.

A Volume Incentives discount gets partially applied if it meets all of the following criteria:

  • Index fee is greater than the global take rate floor.

  • When you subtract the global take rate floor from the Index fee, this value is less than the Volume Incentives discount.

  • Index is able to lower the Volume Incentives discount partially without impacting our global take rate floor.

Index's fee: 9%

Global take rate floor: 8%

Volume Incentives discount: 2%

Result: 

  • Index's fee of 9% is greater than the global take rate floor of 8%.

  • When you subtract the global take rate floor from Index's fee (9%-8%= 1%), this value is less than the Volume Incentives discount of 2%.

  • In this scenario, Index is able to lower the Volume Incentives discount to 1% and the discount gets partially applied.

If the Index fee is lower than the global take rate floor, a Volume Incentives discount will not get applied.

Index's fee: 7%

Global take rate floor: 8%

Volume Incentives discount: 2%

Result: Since Index's fee of 7% is lower than the global take rate floor for 8%, Index does not apply a Volume Incentives discount in this scenario.

Viewing reporting on Volume Incentives for buyers

Publishers and buyers can view if a Volume Incentives discount gets applied for a transaction and the amount of savings the buyer receives by creating a report in the Index UI. When creating a report in the Index UI, include Buyer Volume Incentives Applied and Buyer Volume Incentives - Savings Amount fields in your report. For more information on these fields, see Available fields.