Floor Price (Reserve Price)

A floor price is the lowest clearing price for an impression in a real-time auction. In OpenRTB, the bidfloor field carries this value per impression or per deal. The auction ignores any bid below it.

Floors can be:

• Static — a fixed minimum for a placement or ad unit.
• Dynamic — adjusted per impression based on user, context, or historical bid density.

Why it matters: The floor is the primary lever a publisher or exchange has to protect revenue. Set it too high and you lose bidders (lower fill). Set it too low and you leave money on the table. The goal is to maximize yield (fill × price), not just CPM.

Common misconception

“Raise the floor, raise the revenue.” In practice, a higher floor often chokes competition, reducing the number of bidders and sometimes lowering the final clearing price. The relationship is non-linear.

Floor price is not calculated from other metrics — it is a set value (or a rule that produces a value). The formula for its effect on yield is:

Yield = Fill Rate × Average CPM

Where:

• Fill Rate = (Impressions won) / (Total bid requests)
• Average CPM = average winning bid price × 1000

Caveats

1. Dynamic floors are often computed by the platform using historical bid distributions, segment data, or machine learning models. The exact algorithm varies by vendor.
2. Deal floors (PMP deals) may override the general placement floor.
3. Exchange fees sometimes apply on top of the floor — check your contract.
4. A floor is not the same as a starting bid in a waterfall; it is a hard minimum in a unified auction.

A floor price number alone is meaningless. You must read it alongside fill rate and win rate.

Example dashboard row: | Placement | Floor ($) | Fill Rate | Win Rate | eCPM ($) | |-----------|-----------|-----------|----------|----------| | Homepage ATF | 2.50 | 45% | 22% | 3.10 |

What to look for:

• If floor is high and fill rate is low → you may be pricing out bidders.
• If floor is low and eCPM is high → you might be leaving money on the table (raise floor gradually).
• If win rate is very high (>80%) and floor is low → your floor is probably too low.

Pair with

• eCPM — the actual revenue per thousand impressions.
• Win Rate — how often your floor beats the competition.
• Bid density — the distribution of bids around your floor (if available).

Levers

Publisher-side:

• Static floor changes in the ad server or SSP UI.
• Dynamic floor rules based on country, device, time of day, or user segment.
• Deal floors for PMPs — often higher than open auction floors.
• Header bidding wrapper settings — some wrappers let you set per-bidder floors.

Platform/Exchange-side:

• Exchange default floors for new placements.
• Floor optimization algorithms (e.g., Google Ad Manager dynamic allocation).
• Bid shading — some exchanges reduce the winning bid to just above the second-highest bid, which interacts with floors.

Tradeoffs

Raise floor → higher eCPM per impression, but fewer impressions sold. Lower floor → more impressions sold, but at lower average price.

The optimal floor is where marginal revenue gain from a higher floor equals marginal loss from reduced fill. This is rarely at the extremes.

Easy mistake: A publisher once told their team “just set all floors to $5 CPM.” Fill dropped from 70% to 20%, and total revenue fell 40%. They optimized for CPM instead of RPM.

Floor price is a powerful but dangerous lever — it directly controls the tradeoff between price and volume. The best floor is the one that maximizes total yield, not the one that looks highest in a report.

• Always read floor alongside fill rate and win rate.
• Raise floors incrementally and measure RPM, not just CPM.
• Segment floors by value (country, device, placement) for best results.