What is a Price Floor in the context of digital advertising?

In the context of digital advertising, a Price Floor refers to the minimum price at which a publisher is willing to sell ad inventory. This concept is crucial in programmatic advertising as it establishes a threshold that prevents ads from being served below a certain price.

When advertisers participate in an auction for ad space, the Price Floor ensures that the publisher receives at least a specified amount for displaying an ad. If no bids meet or exceed this threshold, the ad will not be served, safeguarding the publisher’s revenue and the perceived value of their inventory.

This mechanism helps maintain the quality of the advertising environment and can influence the pricing structure within the broader marketplace. Understanding this concept is vital for anyone involved in digital advertising, as it directly impacts how inventory is sold and how advertisers engage with publishers.