Learn when dynamic allocation kicks in within Google Ad Manager and how it helps maximize ad revenue through real-time competition.
🖋 By Meenakshi – AZAD Architects, Barnala
When does dynamic allocation activate in Google Ad Manager?
Dynamic allocation is a powerful feature in Google Ad Manager that allows real-time competition between guaranteed and non-guaranteed demand sources, such as Google Ad Exchange. It ensures that the highest-paying ad wins the impression, optimizing revenue for publishers. But when exactly does dynamic allocation activate in the ad serving process?
In this blog, we will explore the timing, conditions, and logic behind dynamic allocation in GAM and how you can set it up to make the most of every impression.
What Is Dynamic Allocation and How Does It Work?
Understand the concept of dynamic allocation and its role in real-time ad selection.
What Is Dynamic Allocation and How Does It Work?
Dynamic allocation is a key feature in Google Ad Manager (GAM) that ensures the highest-paying ad gets served in real-time. It allows Ad Exchange and other programmatic demand sources to compete against traditional reservation and guaranteed line items for each impression—maximizing yield for publishers.
How It Works:
When an ad request is made:
1. Google Ad Manager evaluates guaranteed and non-guaranteed line items (like direct deals, sponsorships, or network ads).
2. If a programmatic buyer (like Google Ad Exchange) offers a higher CPM than the reserved line item, GAM dynamically selects the higher bid.
3. This real-time decision-making boosts competition and ensures each impression is monetized at the best possible value.
Benefits:
• Increases revenue by letting high-paying real-time bids compete with direct deals.
• Optimizes inventory use by reducing underfilled ad spots.
• Maintains priority settings while improving yield.
Dynamic allocation plays a crucial role in modern programmatic advertising, helping publishers maximize their earnings per impression without manual intervention.
When Does Google Ad Manager Trigger Dynamic Allocation?
The specific point in the ad delivery process when dynamic allocation comes into play.
In Google Ad Manager (GAM), dynamic allocation is triggered during the ad selection phase, right before the ad is delivered to the user. This ensures that every impression is evaluated for maximum revenue potential.
1. After Line Item Eligibility Is Determined
• Once all eligible direct-sold (guaranteed) and remnant (non-guaranteed) line items are considered for an ad request, GAM checks if any of them are ready to serve.
2. Before Final Ad Decision
• If a remnant line item (e.g., AdSense, Ad Exchange) can serve an ad, dynamic allocation kicks in to compare the CPM of programmatic bids with the effective CPM (eCPM) of eligible guaranteed line items.
3. If Programmatic Offers Higher CPM
• If a real-time bidder (like Ad Exchange) bids higher than the guaranteed line item’s eCPM, GAM selects the programmatic ad over the reserved ad.
4. Based on Priorities
• Dynamic allocation respects priority levels. For example, sponsorships or roadblocks still override dynamic bids unless yield optimization is enabled.
Dynamic allocation does not bypass priority settings but ensures that your inventory is monetized based on actual demand and real-time competition, making it a vital tool for maximizing fill rates and revenue.
Requirements for Dynamic Allocation to Activate
Conditions that must be met—like Ad Exchange integration, line item priority, and targeting settings.
For dynamic allocation to function in Google Ad Manager (GAM), certain technical and setup conditions must be in place. These requirements ensure that GAM can intelligently evaluate real-time bids against traditional line items and select the highest-value impression.
Here are the essential requirements:
1. Ad Exchange (AdX) Must Be Linked
• Google Ad Exchange must be integrated with your GAM account. Dynamic allocation only works if programmatic demand sources like AdX are available to compete in the auction.
2. Line Items Must Be Eligible for Competition
• Dynamic allocation is triggered only when eligible reservation or remnant line items (like standard, sponsorship, or price priority) are ready to serve.
• Programmatic buyers can only compete against non-exclusive guaranteed deals or remnant line items.
3. Line Item Priority Must Allow Competition
• Line items with priority 1 or 2 (sponsorship or standard) are considered for competition.
• House or bulk line items (priority 16) may be overridden if a higher CPM bid is available.
4. Targeting Must Match
• Both the guaranteed line item and the programmatic demand must match the same targeting criteria (e.g., geo, device, ad size, key-values).
• If the programmatic demand cannot fulfill the targeting, it will not enter the competition.
5. Creative Approval and Format Compatibility
• Ads from Ad Exchange must have approved creatives and be compatible with the requested ad size and format (e.g., display, native, video).
Meeting these conditions ensures that dynamic allocation activates properly, allowing real-time bidders to compete for inventory and boosting publisher revenue.
Benefits of Dynamic Allocation for Publishers
Explore how it improves competition, boosts CPMs, and increases overall fill rates.
Dynamic allocation in Google Ad Manager (GAM) gives publishers a powerful edge by introducing real-time bidding competition for every ad impression. Here is how this feature positively impacts monetization and inventory performance:
1. Increased Competition
By allowing Ad Exchange and other real-time demand sources to compete with direct deals, dynamic allocation ensures that only the highest-paying ad wins—raising the bar for all bidders.
2. Higher Effective CPMs
With more demand sources competing for inventory, publishers often see a rise in average CPMs. Even traditional direct-sold ads must match or beat dynamic bids, pushing up revenue potential.
3. Better Fill Rates
When a guaranteed or remnant ad is not eligible to serve, dynamic allocation ensures that real-time bidders can step in, reducing missed opportunities and maximizing fill.
4. Optimized Yield Without Extra Effort
Dynamic allocation automates the decision-making process. Publishers do not need to manually weigh bids or rotate line items—GAM does it in real time, optimizing yield for each impression.
5. Improved Inventory Efficiency
Rather than leaving inventory unfilled or under-monetized, dynamic allocation helps you extract full value from every impression across your site or app.
For publishers looking to maximize revenue, minimize waste, and streamline operations, dynamic allocation is a must-use feature within the Google Ad Manager ecosystem.
📌 Thank you!
Follow Finance (AZAD Architects, Barnala) for practical tips from an architect, blogger, technical expert, and financer's lens.
Finance (Azad Architects, Barnala)
