joined:June 27, 2014
Found lots of good info here over the years; just registered today.
I am starting to think that I have been evaluating ad networks (and comparing them to Adsense) incorrectly. However, I'm not sure there is a better way to do it, since every option seems flawed.
What I have done in the past when I was presented with an ad network that seemed credible - Criteo, Lijit, etc. - is to ad them to one of our ad units and have them compete with Adsense. Then over time I would update the CPM to match what they were offering. In essentially all cases, that CPM would drop over time until it was negligible, and I determined that we were better off with straight Adsense.
However, I was thinking about this some more, and realized that however good a network is, this result is inevitable when competing an average
CPM against a dynamic
CPM. Here's an illustration. Let's say that every ad impression has a "true" value x. And to pick a number, let's say Adsense pays us 0.6x for each impression. Now, say there's an awesome ad network that manages to extract the full value, and pays us x per impression. (We don't know that yet though, since we are evaluating that network.) Obviously the ideal result would be that we send all impressions to that network and none to adsense. But what actually happens?
Say the x value of your impressions ranges from 0 to M. If we give the new network a sampling of all our impressions, it should result in an average CPM of M/2. Now we turn on adsense competition. Any impressions where adsense can pay us more than M/2 get sent to adsense. Since adsense only pays us 0.6 of the true value, that means any impressions with value of greater than (M/2) / 0.6, or 0.83M, get sent to adsense - even though the new network would pay more for each of those impressions! Then it gets worse. Since the impressions we're sending to the new network now only range in value from 0 to 0.83M, their new average payout will be just over 0.4M. And now we end up sending impressions to adsense if their value is greater than 0.4M/0.6 = 0.67M, and so on. We keep adjusting the average CPM of the new network down, and adsense keeps taking more impressions, until we end up with essentially all adsense (just as I saw).
So, I'm left to conclude that setting up Adsense (or AdX) to compete in real-time against dynamically-priced networks isn't a good idea. (On the other hand, if you have a lot of fixed-CPM direct advertising, I'm sure it's great.) Anyway, I just did a test of several networks without having them compete against Adsense, and found that some may actually perform very well. Lijit especially is nearly doubling my Adsense CPM in some slots, albeit with a 3x24 frequency cap. Criteo's performance has not been as good, but it still beat Adsense by around 30% with the same frequency cap. Trying a couple others (like Superlinks) but don't have good data back yet. (I also tested a number of backfill networks, including mdotlabs, CPX, and marimedia, but haven't found any that can approach Adsense CPMs.)
One issue is that I'm sure there are instances where Adsense can provide a higher CPM than these networks, even if the network does better on average. By turning off competition, we don't get that. Basically the opposite of the original problem. But since before I always ended up just converging to Adsense alone, this still seems potentially better.
Now, testing isn't finished since those frequency caps also skew things. The next step is to try one network at a time, using Adsense only to serve the passbacks and the remaining impressions once the frequency cap is filled, then look at the combined performance compared to Adsense alone. (Obviously when Adsense is only serving leftover and passback impressions it will have a lower CPM than when it gets everything, so the question will be whether the test network takes enough impressions at a high enough rate that it makes up for this difference.) If I find multiple candidate networks, I could even look at setting up a daisy chain, although I'm not convinced that multiple levels of passbacks are a good idea, given the delay each one causes. (Note that even if you don't daisy-chain passbacks, you can still have multiple networks, since each one can start serving when the next-highest priority one hits its frequency cap. Presumably it would quickly not be worth it though, unless you have a high pageviews/visit.) So I may just send passbacks straight to the backfill level. But basically, the idea is to have one or more taking impressions at the highest priority with frequency caps, from the best-performing to the worst, then have Adsense and AdX competing in real time for the remainder.
Anyway, I'm sure others have run into these same types of questions and problems, so I'm curious how you've dealt with them! Do you agree that having other networks compete with Adsense based on their average CPM doesn't work out? And do you find it's more effective to send passbacks straight to backfill ads, or to daisy chain them? (I've read "experts" recommend both approaches.)
[edited by: martinibuster at 3:12 am (utc) on Jul 1, 2014]
[edit reason] Removed promotional URL. [/edit]