“The Sell Sider” is a column written by the sell side of the digital media community.
The jig is up. And it’s been up for a long while. It’s time to move past dynamic floors.
They simply have no place in the current programmatic ecosystem. They are shortsighted and deny publishers the opportunity to work closely with their clients – many of whom are gearing up for a programmatic-only future. You’re not simply short-changing a bidder by deploying dynamic floors, you’re hindering your ability to support accurate price discovery for buyers. If they can’t price it, they won’t buy it. More importantly, any effort to obscure the value or credibility of any given impression – to represent it as something it’s not – is deceptive.
Dynamic floors, or “soft floors,” allow publishers to create artificial market density in order to drive up the cost of a given impression. In any open exchange, buyers only expect to pay slightly more than the next highest bid. If a buyer bids $2 and the next highest bid is $1.50, most auction mechanics would sell that impression to the buyer at $1.51. When a dynamic floor is introduced into this equation, the SSP will create “phantom demand” that would price the bid at $5 as if that demand actually existed. That figure now represents the high end of the auction. But since it doesn’t exist, the SSP will sell that impression to the buyer at $2, since it is the highest bid below the dynamic floor of $5. This is an artificial price increase of nearly 33% for the buyer.