Research shows you're more likely to survive a plane crash than click on a banner ad. This means that bloggers looking to develop revenue resources that support their content creation efforts need to stay abreast of this vastly changing ecosystem. Bloggers originally staked their claim to AdSense, whose CPM is now measured in pennies rather than dollars. Today bloggers need to know the complexities of programmatic advertising waterfalls and the next trend to optimize their readership. This is a primer on the terms and the trends of today's advertising landscape for bloggers.

A recent article in Digiday lead to explaining what a waterfall is—"The dark art of yield optimization has produced a wide array of techniques for publishers eager to get the most money out of their inventory."

One of the most dependable of these techniques is “waterfalling,” which lets publishers move their inventory from one market to the next to optimize for revenue. But it’s a tactic that has remained stubbornly difficult to implement at times, despite all the promises of efficiency that are often attached to automated selling.

“There’s this assumption in the industry that ‘programmatic’ means easy and that it comes with less overhead, but that’s really not the case,” said The Economist’s director of revenue operations, Daniel Powell-Rees. “It’s a different kind of overhead. Programmatic deals aren’t taking any less time now than direct deals of the same size.”
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As noted, it is part of a dark art and resembles the process of 'day trading' which in investment circles is "the buying and selling of securities on the same day on the basis of small, short-term price fluctuations."

Still confused? The following article explains the programmatic waterfall mystery in a way that you'll appreciate—it uses airline pricing theory: "First, let’s start with some economics. As should be familiar to anyone who has anxiously waited for an airline upgrade, there’s a big difference in price between coach and business class, and it’s not easy to switch between the two."

The Programmatic Waterfall Mystery - This article explores the mystery of why publishers continue to use waterfalling in the supposedly efficient world of real-time bidding (RTB), offering potential explanations but leaving the question unanswered.

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Real-time bidding in simple terms is the automated buying and selling of digital advertisements on the Internet. The RTB process does occur in milliseconds of real-time and seeks to generate the highest CPM for BoardingArea bloggers. Here's a video that gives an excellent overview of this process.

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When we want to make things even more complicated, we throw in what is known as Headline Bidding prior to RTB. You might think of Headline Bidding as pre-bidding. It's an advanced technique within programmatic advertising where we offer our inventory to various ad exchanges simultaneously before making calls to our DFP. Sound complicated? It is. We view it as an alternative to our advertising waterfall which when managed correctly allows us to override some of the inefficiencies of a waterfall because it rearranges the “demand sources” ranking from buying power (the goal is 100% fill) to those who are willing to pay the highest for that ad space. Of course, the challenge is that it constantly needs to be managed because often those willing to pay the highest have much smaller demands (impression buys) which means you are constantly "filling".

Here's a Primer on Headline Bidding - This article serves as a guide to header bidding, explaining its benefits and the steps to implement it, with the aim of maximizing revenue for publishers in the ad tech industry.

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For many of you, all you likely have heard over time is the term CPM. What is a CPM? CPM (cost per mille simply means cost per ad for 1,000 impressions. In online advertising, CPM is the baseline for buying and selling ad impressions.
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​For Example: If an advertiser is paying a $3.00 CPM and purchases 100,000 ad impressions, the advertiser owes BoardingArea $300. This is a fixed CPM model and is popular as it can forecast actual costs for the advertiser.
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​eCPM is the effective cost per 1,000 ad impressions. The reason why this is different than a traditional CPM is that there are factors that can lower an eCPM such as lost impressions in a CPM waterfall, low fill rates, and discrepancies. We may send an ad network 100,000 ad impressions but they may only track 90,000 of them which creates a 10% discrepancy. In the example above, the CPM was $3.00, but the eCPM may be $2.70. Here are just some of the factors that contribute to a lower eCPM: Ad blocking software that eliminates certain impressions thus skewing the count; impression waterfalls of multiple ad networks that have "passback tags" lose impressions when ad servers fail to “talk” to each other; interestingly enough mobile devices generally contribute to higher impression discrepancy percentages; javascript tags when the user does not have javascript turned on in their browser, ad networks that fill with serving PSA’s, blanks or even malware that is not reflected in reporting; occasional ad IP mapping that is not the same as DFPs technology and ad creatives that have large file sizes taking too long to load and impressions are lost. These are just some of the causes of why an eCPM is lower than a CPM. Note: Advertisers like to pay at the eCPM rate, not the initially booked CPM rate.
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​NOTE: eCPM is often what we are actually paid and in the example above, we are paid $270, not $300.
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And finally, rCPM is the calculation of the revenue generated per 1,000 impressions thus revenue is divided by impressions times 1,000. This is commonly used when understanding the profitability of an ad campaign. An advertiser may have an eCPM of $2.70 but an rCPM of only $2.40 which means they won't be back to buy more!

The percentage that an ad shows up on your blog (so if there is a 100% fill rate, then an ad will always be displayed, if it’s a 50% fill rate, it will only be there 50% of the time.) Fill rates can and will fluctuate with a variety of technical challenges among ad networks and ad blockers.

Commonly known as pay-per-click. AdSense is a Pay Per Click network.

The minimum CPM that is established for an ad to show. Setting floor CPMs can and does cause fill rates to go down unless monitored and tuned on a constant basis. Without a floor CPM, the ad goes to the lowest bidder.
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Things have changed since many of you began blogging and perhaps the biggest changes are the challenges and complexities of advertising which allow you to "afford" blogging. RTB is very, very tricky as it is transparent. Here's an example of how and why it has become difficult: say an advertiser is willing to pay a CPM of $7.50 for an ad. The second bidder in the waterfall might bid at $3.50. The original bidder can see that the next bidder is at $3.50 and thus lower their initial bid to $4.00 and still win the ad and the audience. Good for them, bad for the blogger since they were willing to actually pay a CPM of $7.50. This is the efficiency of the marketplace. By managing a number of ad networks we can hope to narrow the gap between the two initial bids and keep the CPM higher. By spreading ourselves too thin in the quality and choice of networks, we can expose ourselves to scenario #1.