Fill Rate and increase of slots

Question

Why should the amount of slots be increased if the fill rate is already only 33%. Wouldnt it make sense to be increase the fillrate by selling "rest spaces" for a reduced price?

Answer 1

Hi Nadja,

Your idea is good in theory, but you risk to erode your own pricing if you do that. What would probably happen is that the advertisers wouldn't purchase the slots until the end of the period, when they know that you will decrease prices for the vacant slots. So, you risk actually getting less revenues if you introduce those discounts – and not more.

However, if you share your idea during the real case ("increase fill rate through discounts for vacant slots") but also share your concerns / limitations ("we need to be careful not to erode our pricing") – that would be an excellent point, which you should definitely make!

Hope this helps! If you want to discuss in more detail, just DM me :)

Best,

Daniel

Answer 2

This was my intuition at first as well, but keep in mind that 33% is only an average. The way the case explicitly mentions premium ad space I would assume that desirable ad space is highly concentrated on some pages (say, with listings in urban areas) where we actually have a very high fill rate. When I attempted a case I was actually thinking of a rather similar thing, but with dynamic pricing instead - so we can perhaps increase fill rate while keeping the same average price by selling premium ad slots more expensively and low-value slots more cheaply.

Answer 3

Hello!

I agree with Daniel, the issue you can collaterally end up having is clients realizing, leading to price dumping.

However, it´s indeed a good intuition, and don´t hesitate to share this toughts as alternatives when doing the cases (with, for sure, possible consequences commented too).

Hope it helps!

Cheers,

Clara

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