In affiliate marketing, the term Floor CPM stands for the minimum possible cost per impression the publisher agrees to sell the ads inventory for one ad exchange or ad network. If there are some offers cheaper, they won’t be shown up for the publishers who are not interested in it.
For example, assuming the publisher has set the floor CPM price floor to $3, he won’t get the offers with the amount below $3 on his website.
Setting the right floor price can significantly influence your revenue as a result: if the floor price is too low, it can greatly impact your ROI, if the floor CPM is too high, you will see the sales decline, which leads to poor ROI as well. Finding the golden mean in a floor price is the best way of both increasing the income and finding the right clients ready to pay for it as well.
There are several practices of how you can optimize your floor CPM:
- Set a low floor CPM price for the formats to get the satisfying fill rate
- Start from the cheap offers for floor price to learn the market (the offers available), and then end up with the price accessible for you and your future clients
- Spot some great opportunities based on the advertiser’s data and floor CPM increasing accordingly
