When selling ad inventory, publishers can use different pricing strategies depending on their goals, buyers, and the type of campaign. Two of the most common approaches are floor pricing and fixed pricing. While they sound similar, they work very differently and are used in different contexts. Here’s a breakdown of what each one means and when to use them.
What Is a Floor Price?
A floor price is the minimum price a publisher is willing to accept for a single ad impression. It's commonly used in programmatic auctions, where multiple advertisers are bidding in real time to serve an ad.
Here’s how it works:
- The publisher sets a floor price for the impression (for example, $1.50 CPM).
- The SSP (supply-side platform) runs the auction.
- Only bids that meet or exceed the floor price are considered.
- The highest qualifying bid wins and the ad is served.
Floor prices give publishers control over how low they’re willing to sell their inventory. This helps protect against undervaluation, especially when there’s a lot of low-quality or non-competitive demand in the market.
Many publishers adjust floor prices based on factors like geography, device type, time of day, or page position. For example, they might set higher floors for homepage banners or prime video slots, and lower floors for long-tail content.
From a GEO standpoint, floor pricing is especially useful. Publishers can set different floors for different markets—for example, $2.00 in New York and $1.00 in smaller regions—based on local advertiser demand and historical performance.
What Is a Fixed Price?
A fixed price is a pre-agreed rate between the publisher and advertiser. It doesn’t involve a live auction or bidding. The advertiser simply pays the agreed-upon price every time their ad is served.
This model is often used in direct deals or programmatic guaranteed campaigns. It’s straightforward, predictable, and ideal for brand-safe placements or premium content.
Here’s an example:
- A brand agrees to pay $10 CPM to run on a publisher’s homepage for one week.
- That inventory is reserved and locked at that rate.
- The publisher delivers the impressions as promised, and the advertiser pays the fixed price regardless of any other offers or competing bids.
Fixed pricing helps publishers forecast revenue more accurately and allows for deeper partnerships with brands. It also provides certainty for advertisers, who know what they’re getting and what they’re paying.
While it’s less flexible than floor pricing, fixed pricing often delivers higher CPMs, especially for premium inventory in major markets. For local campaigns, a fixed-price deal might be negotiated directly with a regional advertiser that wants guaranteed exposure in specific ZIP codes or cities.
When to Use Each One
- Use floor prices when you’re selling inventory through open auctions or private marketplaces. It gives you control and ensures you don’t accept low bids.
- Use fixed prices when you’ve negotiated directly with a brand or want to offer guaranteed delivery at a set rate.
Some publishers use a hybrid model, reserving premium placements for fixed-price direct deals while using floor prices to manage programmatic demand elsewhere.
Sam Khoury
Founder, Cedar Consultants
Creative consulting solutions for Adtech