Sell-Side optimization
Important
This guide only applies to the legacy line item. If you are using the augmented line item (ALI), see Optimization Guide - ALI.
The online advertising marketplace is in many ways defined by its high levels of uncertainty. As a seller's revenue is often linked to an ad's success on the seller's inventory (measured through clicks or conversions), optimization gives sellers several controls that can be leveraged to minimize risk and maximize return.
Publishers consider buyer auction bids to be either Uncertain Revenue or Certain Revenue.
Uncertain revenue
When a campaign begins serving impressions on inventory in the RTB marketplace, it is unclear how much revenue nearly all non-managed CPC or CPA bids will generate; while the buyer (network) has agreed to pay a fixed rate for each success event on their ad, the optimization engine doesn't know how frequently success events will occur. This is uncertain revenue and cannot be accurately quantified until a significant number of success events have occurred to give a statistically valid sample (by determining the net revenue from each).
Certain revenue
While evaluating the value of uncertain bids, sellers can also choose to hold auctions that maximize bids from sources designated as certain revenue. Optimized bids can be any CPM base-bids, optimized CPC bids, or optimized CPA bids. These bids are treated as certain revenue because, through repeated success events occurring during the learn phase of the optimization process, it is possible to estimate an accurate value from those impressions.
Optimization uses an algorithm to intelligently allocate a percentage of total auctions to each of these two categories. The process, called Dynamic Learn Percentage, considers success rates before maximizing revenue from an expanded group of certain revenue sources.
Sellers can also establish a Give Up Price. The give up price is a bid price threshold which determines how bid prices are ranked in Learn Auctions and Revenue Auctions. If all bids offered in the auction type are below the user specified give up price, the auction is opened up to all bids.