This is the ad-auction meaning, unrelated to a product's MSRP or the economics concept of a price floor. On a retail media network (RMN) it is the price gate on inventory, such as a sponsored-product slot or an offsite impression.
How floor prices work in RMN auctions
Offsite RMN inventory transacts over OpenRTB, the IAB Tech Lab standard for real-time bidding, and in that spec the impression object carries a bidfloor field: "the minimum bid for this impression expressed in CPM," defaulting to 0 when no minimum is required. The retailer's SSP or exchange sets that floor; bidders must meet or exceed it, and any bid below it is rejected during the auction.
IAB Tech Lab treats bid floors as a governed part of the spec rather than a vendor add-on, and OpenRTB v2.6 (September 2023) extended them with a DurFloor object for time-varying video and audio floors.
Onsite auctions apply the same principle from the buy side: in a retailer's sponsored-products cost-per-click auction, the advertiser's default or minimum bid is the floor it must clear, and a bid beneath it never enters the auction.
Soft floor vs hard floor
SSPs run two kinds of floor, and the distinction governs which bids survive. A hard floor is a fixed minimum beneath which bids are rejected outright. A soft floor is a lower threshold used to attract more buyers and lift fill rate, where bids under it may still be accepted under different rules.
| Hard floor | Soft floor | |
|---|---|---|
| Behavior | Fixed minimum; bids below are rejected | Lower threshold; bids below may still be accepted under different rules |
| Bidder visibility | Bid must clear it to enter | May not be exposed to the bidder |
| When used | Protect inventory value, attract higher-quality demand | Encourage more bidders, improve fill rate |
Both demand manual adjustment to shifting market conditions, which is why many SSPs now run dynamic, or optimized, floors that move automatically with demand.
Floor price in practice: an example
Consider an advertiser running a retailer's sponsored-products campaign: the keyword bid it sets is the floor it must clear to win the placement in the cost-per-click auction.
On the supply side the same retailer sells offsite impressions through its SSP, and the path now spans three parties. The SSP writes a bidfloor (a minimum CPM) onto each impression in the OpenRTB bid request, and the request reaches a DSP. The DSP's bid for a brand must meet or exceed that floor or it is dropped. So one retailer runs two floors at once: the minimum bid to compete onsite, and the minimum CPM enforced down the offsite supply path. For video or audio inventory, OpenRTB v2.6's DurFloor lets the SSP vary that floor by ad duration rather than holding one flat CPM.
Floor price vs reserve price
"Reserve price" is the seller-side name for the same gate, inherited from auction theory: the lowest price at which a seller agrees to transact. In real-time bidding the supply side (the exchange, the SSP, or the RMN that owns the impression) is the seller. Its floor and its reserve are one number viewed from two seats. OpenRTB does not even separate them: the bidfloor field is the per-impression minimum CPM, and the spec defines it as the price below which the seller will not transact, the textbook definition of a reserve.
In casual usage the words drift: "reserve" leans toward the seller's strategy and "floor" toward the threshold a bidder sees. But in an OpenRTB auction they resolve to the same enforced minimum, the lowest bid below which no demand can win.
Why it matters for brands and sellers
Floors set the minimum cost to compete, and they cut both ways. Set one too high and you thin out demand, shrinking fill rate and wins. Set it too low and you forfeit revenue. For advertisers the minimum or default bid governs whether ads serve and at what CPC or CPM.
If you buy on the Amazon retail media network, the floor is your entry price before efficiency enters the picture. An Amazon keyword research tool helps you set bids that clear competitive floors without overpaying. And sellers running sponsored placements should treat the minimum bid as their first lever.
Related terms
- First-price auction: the rule for how the winner pays once a bid clears the floor.
- Auction-based pricing: the broad model in which the floor is one parameter.
- Real-time bidding (RTB): the system the
bidfloorfield operates within. - Bid request: the OpenRTB message that carries the
bidfloor.
Frequently asked questions
What is a floor price in advertising?
A floor price in advertising is the minimum bid an ad auction will accept for an impression or placement. On a retail media network the retailer's SSP sets it as a reserve, so any bid below it is rejected and advertisers must clear the floor for their bid to compete.
What is the difference between a soft floor and a hard floor?
A hard floor is a fixed minimum beneath which bids are rejected outright, whereas a soft floor is a lower threshold used to attract more buyers and raise fill rate, where bids underneath it may still be accepted under different rules. Both require manual adjustment as demand shifts.
Are floor price and reserve price the same?
In ad-tech, yes, effectively. OpenRTB's bidfloor functions as a per-impression reserve price (the minimum the seller will accept), so "floor" and "reserve" name the same auction gate, the lowest bid that can win. That differs from an auction-house reserve or an economics price floor.
What does floor price mean?
In retail media, floor price means the minimum bid an RMN auction will accept before a bid can win an impression or placement. The supply side sets it to protect inventory value, making it the ad-auction reserve, a separate idea from a product's retail price.
How do I set a floor or minimum bid on an RMN like Amazon Ads?
You set it through your campaign's bid. In a sponsored-products cost-per-click auction, your default or minimum bid is the floor you must clear to win a placement, so a bid below the threshold does not serve. An Amazon keyword research tool helps you pick bids that clear competitive floors.
