What is Dynamic Allocation?
Dynamic Allocation allows Publishers to integrate all of Google’s display networks to compete in real-time with their remnant and guaranteed line items. This enables AdX and AdSense to be available within Google Ad Manager, GAM (formerly Doubleclick for Publishers, DFP). This means you can make AdSense and Ad Exchange compete with GAM line items, without damaging the performance of guaranteed deals.
Who is it for?
Dynamic Allocation is available through GAM and can, therefore, be used by any publisher using GAM to manage their advertising.
How does it work?
In order to understand how Dynamic Allocation works, it is important to understand not only the Google products compatible with Dynamic Allocation but also the different line items and how decisions are made.
Google Products
Compatible Google products are AdX and AdSense. While AdX enables more sophisticated and larger 3rd party demand buyers as well as preferred deals and private auctions, AdSense is more closely associated with scale and remnant impressions.
Line Items
Guaranteed line items usually have the highest priority within GAM and include Sponsored and Standard line items. These are usually set up with an impression or click goal or even a percentage of delivery.
Non-Guaranteed line items usually include AdX, AdSense, Remnant and House Line Items. These line items fall into lower priority and while AdX and AdSense compete on price they have no real delivery goals. Remnant and House ads are generally lower priced inventory coming in at the lowest priority with bulk or network line items.
How it all fits together
Dynamic Allocation enables open auction bids to compete in real-time with both guaranteed and non-guaranteed line items. The increased competition occurs on an impression by impression basis. By enabling dynamic allocation in GAM, a publisher can make AdSense and AdX compete with GAM line items, without compromising the performance of guaranteed deals.
Dynamic Allocation Decision-Making
Dynamic Allocation is designed to show the ad with the highest CPM and maximize revenues for publishers using Google products. As such when enabled, Dynamic Allocation is active across a publishers’ entire network. A publisher makes their inventory eligible to compete via a combination of Protections, URLs, and unified pricing rules.
- When a publisher has only remnant line items competing with AdX, it is the highest CPM of the remnant line items that haven’t reached their goal that is used
- If AdX and AdSense have the same priority set, then GAM randomly selects one, without taking historic CPMs into account
- If the competition includes guaranteed line items with higher priority within GAM than AdX, then a temporary CPM, taking delivery, timing, and CPM into account is used to provide an opportunity cost
- AdX and remnant line items are then served should they beat the opportunity cost of not serving the guaranteed line item ensuring there is no under-delivery
Steps of dynamic allocation
Step 1 An ad request is sent to GAM
Step 2 GAM finds the best-guaranteed line item eligible to serve for the ad request and calculates a temporary CPM based on the line item’s current delivery
Step 3 GAM finds an eligible remnant line item with the highest CPM
Step 4 GAM calls AdX to find ads which can beat the temporary CPM of the best-guaranteed line item
Step 5 GAM selects the line item with the highest CPM to serve an ad, protecting guaranteed ads in all cases
Header Bidding & EBDA in dynamic allocation
Effectively Header Bidding is Dynamic Allocation for non-Google products. Third-party ad networks have been able to compete directly within Header Bidding in a way that they could not through Dynamic Allocation in GAM.
EBDA (Exchange Bidding in Dynamic Allocation) was Google’s direct response to the rise of Header Bidding. Reducing the complexity of Header Bidding setups and integration by enabling ad exchanges and SSPs to compete with AdX in GAM.
Pros
Ease – GAM handles the management and syncing of the data
Competition – With increased competition from guaranteed line items and Google products higher CPMs for each impression are expected
Configurability – Multiple settings enable frequency capping and delivery setting as per campaign goals
Fill – Remnant inventory fill rates benefit in particular from the opportunity to compete
Cons
Inefficient Decision-Making – When AdX and AdSense have the same priority set, GAM will choose the line item randomly without taking note of previous CPM or the highest CPM.
Prioritization Black Box – Priorities within GAM can be somewhat of a black box in terms of the many configurations and settings that lead to PMP and guaranteed deal issues with “Bid lost in dynamic allocation”