When you’re a part of the ad tech world, you hear about premium and remnant ad inventory a lot. While they may sound straightforward enough, the actual definition of the two types of inventories varies greatly.
For example, publishers may consider their advertising space (or ad units) to be premium inventory if it’s “above-the-fold.” On the other hand, non-optimal ad spaces are considered to fill remnant inventory. In reality, premium inventory is sold at a higher price and the leftover (unsold) inventory is deemed remnant.
In this article, we’re going to focus on understanding what remnant ads are and how to effectively manage them.
What is remnant advertising?
Remnant advertising refers to the remaining inventory that publishers are unable to sell for premium prices like with direct deals.
We’ve previously explored different programmatic types and learned that premium deals generally have a higher priority than normal open auctions. If an impression can’t be filled through a direct or PMP deal, it will be auctioned through real-time bidding (RTB). With RTB, a publisher isn’t able to determine a fixed CPM price. As such, one would want to minimize how much remnant inventory one has.
Pros and Cons of remnant ad inventory
- Increased fill rate: Selling your inventory through RTB auctions enables better exposure and can help fill ad space that wasn’t previously promised through a deal.
- Better control: Publishers can use programmatic bid floor pricing to avoid selling their inventory to low-quality advertisers.
- Lower CPMs: While RTB auctions will give publishers better exposure, it compromises CPMs and the ad revenue they would’ve received through premium deals.
- More fees: Selling programmatically comes with a cost. This is especially true if you’re working with an SSPs or a managed service that specializes in Ad Ops to handle the bidding process for you.
How to manage remnant ads
A publisher’s main goal is to monetize every possible ad impression on their website. As a result, it’s imperative to effectively control their leftover ad inventory.
Here are 5 ways to help you manage your remnant ad inventory:
1. Optimize bid price floors
Choosing the right bid price floor can be tricky business.
Price too low, and you risk increased ad fraud. Pricing too high can result in unfilled impressions. That’s why you’ll need to analyze and update your price floor to ensure a good mix between your fill rate and maximizing your ad revenue.
2. Use programmatic direct deals
Programmatic direct is often used as an umbrella term for programmatic guaranteed, automatic guaranteed, and preferred deals. These deals arguably offer the best chance for publishers to optimize their impression revenues before hitting the open market — where they’ll undoubtedly have to settle for significantly less.
With preferred deals, publishers can let advertisers buy their inventory at a negotiated and fixed price after giving them a look at what they have. Advertisers that enter preferred deals will typically pay much better compared to what you’ll see in the open auction, which improves your chance of getting a substantial price for your “leftovers.”
However, the advertiser is not obligated to bid at the negotiated price. For added security, establishing programmatic guaranteed deals ensures that the advertiser will buy your inventory.
3. Have a backup plan
If RTB can’t fill your impressions, then you’ll have an unfilled impression scenario. In other words, you’ll be at a loss — money-wise and ad space-wise. Therefore, your best bet is to set up house ads to reduce any loss of impressions.
You can use this space for an important announcement, new product or feature launch, an upcoming podcast episode with an industry-known guest speaker, or whatever is most relevant to your website and niche.
Ultimately, a backup plan means never missing an impression for your ads.
4. Partner with multiple demand partners
It goes without saying that the more demand you generate, the more competitive your ad auctions will get.
As such, it’s better to work with as many demand partners as possible. Of course, upon doing this, it’s also necessary to test their performance and move on to the next one if it doesn’t work (and repeat the process until you find a good partner).
5. Understand your audience for better targeting
The entire purpose of buying and selling impressions is to deliver relevant ads that encourage either brand awareness or a sales conversion. One way to ensure that your remnant inventory is always sold at optimal prices is to ensure that it can fulfill an advertiser’s audience targeting needs.
Of course, the only way to do this is to make sure you get an understanding of your own audience — as in the users that come to your page. Whether you run a news website or an eCommerce website, chances are you already know your audience demographics. However, it’s always a good idea to dig deeper to grow your audience and understand who they are.
Think of it this way — even when it comes to buying remnant impressions, advertisers still want your visitors to be a good match for their ad campaigns.
Remnant advertising refers to the “unsold” inventory that was not packaged with pre-existing programmatic deals like direct or PMP deals. Remnant inventory comes with its own pros and cons.
Some of the pros include an increased fill rate and better control of how the inventory is priced. However, it also comes with its own cons, such as lower CPMs and dealing with more fees through SSPs or managed services.
One of the most important goals for publishers is maximizing their ad revenue. As such, it is important to manage one’s remnant inventory. We’ve identified 5 ways to do just that:
- Optimize bid price floors
- Use programmatic direct deals
- Have a backup plan
- Partner with multiple demand partners
- Understand your audience for better targeting
Leveraging any, or all, of these suggestions can assist with selling your impressions at the maximum possible value without seeing a major drop in your fill rate.
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