5 facts about fill rates
Feeling a little bit lost in the language of digital advertising automation?
This is the first of a series of posts we’ve got planned to help define and/or simplify commonly used terminology in and around the topic.
1. The fill rate formula
Within the context of online advertising, the fill rate is the percent of impressions that a publisher allocates to an ad network that the network actually fills with paid advertising. For example, if a publisher delivers 100,000 impressions to an ad network, the ad network may ‘fill’ 70,000 impressions with paid ads, and default the remaining 30,000. This equates to a 70% fill rate.
2. Fill rates influence eCPMs
When evaluating the true value of an ad network’s CPMs, it is important to factor in fill rates. Using the above example, a $10CPM at a fill rate of 70% actually nets out to a $7CPM ($700) when amortized across the total number of impressions delivered. Another ad network might be offering a $9CPM, but at a fill rate of 90%, their effective CPM of $8.10 ($810) turns out to be a more profitable option. When it comes to truly understanding the CPMs that an ad network is delivering, the fill rate is an essential data point.
3. Fill rates fluctuate
There are many factors that influence fill rates, and they vary from network to network. First, there are external influences like network growth and traffic volatility across the collection of sites the network represents, which impacts the volume of impressions the network needs to fill, overall, and subsequently, the number they can fill per publisher. Additionally, many ad networks leverage multiple ad flows to monetize the impressions they represent, which means they then need to optimize which ad flows deliver which impressions according to rates and availability. This process of maximizing revenue across ad flow channels is known as yield management, and is a major contributor to the fluidity of fill rates. While, for the most part, an ad network has a solid grasp on their average fill rate, it is rarely a measure that is guaranteed.
4. Fill rates can negatively impact ads quality
In many cases, achieving a 100% fill rate means that 100% of the impressions are filled and paid, but not necessarily with the kind of ads a website publisher or its audience would consider relevant or tasteful. Successful online publishers have learned that the ads they run on their site, the performance of those ads and the website visitor experience all go hand-in-hand. The relevance of an ad to the publisher’s audience (or lack thereof) can impact both the performance of the ad as well as the audience’s perception of the website and/or willingness to return. Too much focus on filling the unsold impressions can lead to lower quality ads that may bolster the net effective CPM in the short term, but negatively impact performance and/or repeat visits – and subsequently ad revenue – in the long run.
5. Local yokel media’s fill rate delivers the right kind of revenue
As specialists in hyperlocal digital advertising, we believe that the relevance of the ads a hyperlocal publisher runs on their site is central to our mutual success. We are proud that our fill rate represents a profitable combination of curated national ads from select premium remnant ad partners, as well as ads from regional and local businesses that have been sold directly by our team. We are constantly optimizing and refining our mix to deliver eCPMs that rival those of other networks, in terms of dollar value, ad relevance and a fill rate that ranges from 65-95%.
Do you have a question about fill rates or comment to share? Please feel free to to do so below, we’d be happy to strike up a conversation!