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Oath Inc.

5 Estimated Profit Panel under Deals Insights

Use Estimated Profit panel to calculate the estimated impact of running the deal in your inventory against selling the same impressions in the open market.

  • Can I make additional revenue by running a deal on my inventory?
  • To answer this question you must anticipate buyer behavior upon removing the deal. In other words will the buyer still purchase inventory within open auctions without a pre-negotiated deal or will the buyer withdraw from all auctions?
  • Select one of the hypotheses on buyer behavior: Stop buying, Uncertain, Buy in the open market. The default hypothesis is set to Uncertain. Once a hypothesis is selected it will be remembered until changed.

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Buyer Hypothesis

Hypotheses

Description

Stop buying

The buyer would withdraw from the auctions if there were no deal. It is the most optimistic approach with regards to deal profit. When the buyer does not participate in the open market it does not impact closing price with bids.

In this case, if estimated profit is:

  • Negative, the deal is never profitable: other buyers in the open market would have paid more for the same impressions.

  • Positive, that means that other buyers would have bid lower than the deal price for the same impressions in the open market.

Buy on the open market

The buyer would purchase the impressions on the open market even if there were no deal. It is the conservative approach regarding profit since the buyer will bid for the same impressions even without a deal and thereby impact closing price in the open market. Retargeters typically fall into this category. If estimated profit is:

  • Positive, the deal is always profitable: the buyer would have paid less to win the same impressions in the open market.

  • Negative, that means that there are valuable impressions for the buyer within the deal and buyer would have paid more for the same inventory in the open market.

Uncertain (average)

We are unable to predict buyer behavior if they have not set up a deal. It is the average profit between the "stop buying" and "buy" hypotheses. Withdraw and buy hypotheses are used as extremes of the confidence interval for the deal profitability.


Profitability Graph

The graph shows the estimated impact based on the selected hypothesis.

  • The first bar “revenue w/o deal” shows the simulated revenue without the deal.
  • The third bar “revenue with deal” shows the current revenue with the deal in place.
  • The middle bar “deal impact” shows the difference between the simulation and the current revenue, in other words, the deal profit. The middle column is visible if the deal if profitable (positive impact) or not profitable (negative impact).

 

If deal is profitable

If deal is not profitable

Stop buying

(Deal vs No Deal & no buyer)

Other buyers bid lower than deal price on the same inventory in open market

Deal never profitable

Other buyers bid higher than deal price on the same inventory in open market

Buying on the open market

(Deal vs No Deal & with buyer)

Deal always profitable

Buyer would have paid less on same inventory in open market

Buyer would have paid more on same inventory in open market (buyer is selective with  impressions)

Uncertain

(Deal vs No Deal & unknown buyer behavior)

On average, deal brings value to the seller

On average, deal doesn’t bring  value to the seller