Floor prices have been part of Ad Exchange for years, and are a vital tool for publishers to ensure their inventory isn't being bought for below market value.

You may have noticed in the December 3 release notes for Ad Manager that Target CPM is now out of beta and available for all Ad Exchange users.

Until recently, floor prices in Ad Exchange have been "hard" floors, where a bid from an advertiser or exchange must exceed the floor price in order to win the impression.

Target CPM is a dynamic floor price, which means Google can adjust your floor price higher or lower in order to increase the effective CPM.

As a Google channel partner, we've had access to the Target CPM beta for a few weeks and thought we'd share some of our results.

If you were wondering whether Target CPM would allow you to be more aggressive with your floor prices, you're not alone.

Here's a quote from the Ad Exchange documentation, emphasis ours:

Target CPM can earn you more revenue over time by adjusting floor prices to match more bids. Floor prices on individual bid requests can be either higher or lower than the target CPM you indicate. Average CPM for your inventory, however, is equal to or higher than the target CPM you specify. Best practice suggest that the target CPM not be higher than the existing floor price.

Across all our experiments, we have seen just one instance where a Target CPM higher than the existing floor price was the way to go. In every other case, leaving the Target CPM equal to the existing floor price got a superior result.

Perhaps most importantly, we're yet to see a properly-configured Target CPM rule lead to a decrease in revenue, so you can start using it today without a worry.

To get started, open Ad Manager. From the menu on the left, select Inventory > Ad Exchange rules. Then either click the New display rule button at the top of the page, or edit one of your existing rules, then scroll down to the Pricing and Blocking section and select Set target CPMs:


If you don't currently use any rules, a great way to start is creating new default rules for your key markets (ie. where most of your audience are based) by using geography targeting:


Need help with your floor price strategy? Don't have access to Google Ad Exchange? We can help – get in touch with us using the form below.