Choose the right product for your proposal line item
This article provides you with details about how to choose the right product for your proposal along with some examples. The line item type and rate type are fixed in the product and cannot be changed in the proposal line item. It's important to understand which products you need to choose while building your proposal so that the advertiser is being billed correctly and so that the reconciliation process goes smoothly.
In this article, we'll cover:
- Rate, line item, and product type combinations
- Kinds of contracted volume
- Example of cost per unit
Proposal line items derive their line item type and rate type from the products selected in the catalog.
Products come in different combinations of line item type and rate type. You should choose your product based on how you want to charge your advertiser (for example, CPM or CPC), the kind of campaign desired by the advertiser (for example, sponsorship versus standard), whether the ad is served though DFP or not ("DFP ads" versus "Non-DFP ads"), or whether you're capturing a charge for services rendered outside of DFP, such as consulting or creative services ("Offline charge"). The following table shows which rate types are available under which product types, along with associated line item types.
|Line item types ⇩||DFP||NON-DFP||OFFLINE||CLICK-TRACKING ONLY|
|Not specified or not applicable||-||CPM, CPC, CPD, Cost per unit||CPD, Cost per unit, Flat fee||CPC|
|Sponsorship||CPM, CPC, CPD||CPM, CPC, CPD||--||--|
|Standard||CPC, CPM||CPC, CPM||--||--|
|Network||CPM, CPC, CPD||CPM, CPC, CPD||--||--|
|Bulk||CPC, CPM||CPC, CPM||--||--|
|Price priority||CPC, CPM||CPC, CPM||--||--|
|House||CPC, CPM||CPC, CPM||--||--|
There are two possible cases to consider. One is where DFP is not involved with ad delivery on the website, and the other is where DFP is not solely involved with ad delivery on the website:
- DFP is not involved: the advertiser's ad was not trafficked via or served by DFP. For example, there might be a hard-coded creative or in-house video ad server that renders the ad instead of DFP—that is, a third-party ad server renders the ad.
- DFP is not solely involved: A DFP line item served the advertiser's ad, but the advertiser used a third-party service to track clicks or impressions for the purposes of reconciliation.
DFP sales management has the advantage of allowing you to manage both cases: where DFP is not involved at all and where DFP is not solely involved—that is, where the advertiser is using a third-party service to track delivery.
- DFP is not involved: the advertiser's ad is not trafficked via or served by DFP—that is, a third-party ad server renders the ad.
While DFP does not serve the ad and there is no delivery line item, this product can be used to represent the third-party line item for the purposes of billing and reconciliation later.
Proposal line items in this case should be created with the product type "Non-DFP ads". The billing source could be set to "Contracted volume" or "Contracted revenue" if your advertiser agreed to be billed based on a contracted value. Alternatively, if your advertiser agreed to be billed based on what the third-party ad server reports, the billing source for the proposal line item should be set to "Third-party (actual)".
- DFP is not solely involved: A DFP line item serves the advertiser's ad, but the advertiser uses a third-party service to track clicks or impressions for the purposes of reconciliation and billing. In this case, a proposal line item should be created with the product type "DFP ads" and the billing source in the proposal line item set to "Third-party (actual)".
As a matter of good practice, the "Non-DFP" and "Offline charge" product types should not be confused or considered interchangeable. Reserve the "Offline charge" product type for any transaction with the advertisers or agency which is not related to delivery or is not otherwise covered by the other two types.
Offline charge products come with the rate types CPD, Cost per unit, and Flat fee. Use the flat fee rate type for transactions with your advertiser that are not charged by either unit or day.
The line item type and rate type of your proposal line item determine the kind of contracted volume you can enter. The table below is valid for both the DFP ads and non-DFP ads product types. The non-DFP ads product type has an additional "Not specified" line item type which allows an additional rate type of "Cost per unit". The "Offline charge" product type does not contain a line item type setting and is, therefore, not represented on the table. The rate types available for an offline charges are "CPD", "Cost per unit", and "Flat fee".
|Line item type||Rate type||Contracted volume|
|Not specified (Non-DFP ads only)||CPM, CPC, CPD, Cost per unit||Quantity|
|Sponsorship||CPM, CPC, CPD||Goal|
|Standard (High, Normal, Low)||CPM, CPC||Contracted quantity|
|Network||CPM, CPC, CPD||Goal|
|Price priority||CPM, CPC||Limit|
Sponsorships are sold on the basis of cost per thousand impressions (CPM), cost per click (CPC), or cost per day (CPD). The goal you enter represents the percentage desired by the advertiser based on total volume possible. So, for example, if a particular piece of inventory typically serves 1,000,000 impressions a day, and you entered a goal of 50%, the target number of impressions would be half that or 500,000 impressions.
Network and House line item types are sold on the basis of CPM, CPC, CPD and CPM, CPC respectively. The goal in this case represents a percentage of the volume that remains after all guaranteed line items (sponsorship and standard) have satisfied their delivery goals up to the present. So, for example, suppose you book a network line item with a goal of 50% against the same piece of inventory that typically serves 1,000,000 impressions a day. Suppose also that all of the sponsorship and standard line items have satisfied their delivery goals up to now and have delivered a total of 800,000 impressions on this inventory. This means that the network line item you booked with a goal of 50% can serve up to 100,000 impressions on this inventory, 50% of the remaining 200,000 impressions.
Learn more about line item types.
Cost per unit is a rate type meant to cover any transaction with the publisher that cannot be based on the other rate types available. It can, for example, be used in lieu of a CPA rate type where the advertiser wants to be billed based on conversions, or it might be used for any other charge (per unit) for which you want to bill the advertiser.
Let's say for example the advertiser, ACME Online News, wants an email campaign, but the email campaign will actually be sent and managed by a third-party emailing service and is a part of a larger campaign with delivery line items that are delivered in DFP. In your proposal, you'll have proposal line items of the "DFP ads" for the delivery line items. To represent the email campaign handled by the third-party service, you'll want to choose a product with the "Non-DFP" product type to represent this aspect of the campaign and to assist you in reconciliation later.
Now suppose that ACME Online News agrees to pay $00.05 for every email that goes out, with a quantity specified of 500,000 emails to be sent. Because you'll be charging on a per-unit basis, you'll want to make sure and choose a product with the "Non-DFP" product type and with a "Cost per unit" rate type. This will let you specify the rate ($00.05 in this case) and the number of units (500,000).
In this case, your billing agreement with ACME Online News might be based on contracted amount (500,000 units at $00.05 results in $25,000) or based on actual number of units delivered. Once the the third-party reports how many emails were sent, this value can be reflected during reconciliation.
Generally, this product type can be used to capture any charge for which you need to bill the advertiser outside of ad delivery—for example, creative services that you might provide to the advertiser when your team of digital artist creates the ad.
Suppose, in this case, the advertiser agrees to be billed on a per-hour basis for these creative services. You estimate the number of hours and negotiate with the advertiser, landing on 40 hours of work at $100 per hour for creative services. In this case, you choose a product with the "Offline charge" product type, and because you have negotiated a per-unit charge (40 hours), you want to make sure to select an "Offline charge" product with a "Cost per unit" rate type.
You can only choose a contracted billing source in this case—either "Contracted volume" or "Contracted revenue". If the actual units do not turn out to be correct, you can negotiate a different amount to bill the advertiser during reconciliation and simply change the billable revenue directly during that process.