According to Google, the switch to unified pricing rules and a unified first price auction
will help our partners simplify how they manage advertising revenue and
increase transparency for everyone in the ecosystem. We understand these
changes will impact how publishers operate their advertising
businesses, so over the next few months our teams will be working with
our partners to help them with this transition. We are excited to take
this next step together.
Google is making a change to its programmatic exchange that will likely result in marketers paying more for their ads, at least in the short term until brands adjust.
Under a plan announced Wednesday, Google Ad Manager, previously known as Adx, will move to a first-price auction, a significant shift that will resonate across the $48 billion programmatic landscape.
"By simplifying our auction in Ad Manager, we can help make it easier for publishers and app developers to manage and get fair value for their inventory," Google stated in a blog post.
Google previously operated on a second-price auction model, which generally speaking, is similar to winning something on eBay. For example, if the highest bidder bid $5 for an ad, and the second highest bidder bid $3 for the same ad, then the highest bidder would pay $3.01 — just a smidge more than the second highest bid. Now, however, what someone bids is what they pay. Because Google is so critical to how digital ads are bought and sold, the implications of the change will be felt across the industry.
“Moving to a first price auction puts Google at parity with other exchanges and SSPs in the market, and will contribute to a much fairer transactional process across demand sources. The move also provides significantly greater information transparency to both advertisers looking to understand their working media dollars, and publishers looking to assess the fair market value of their supply.”
- Scott Mulqueen, VP Programmatic and Data Product Operations, Trusted Media Brands
Google is making a change to its programmatic exchange that will likely result in marketers paying more for their ads, at least in the short term until brands adjust.
Under a plan announced Wednesday, Google Ad Manager, previously known as Adx, will move to a first-price auction, a significant shift that will resonate across the $48 billion programmatic landscape.
"By simplifying our auction in Ad Manager, we can help make it easier for publishers and app developers to manage and get fair value for their inventory," Google stated in a blog post.
Google previously operated on a second-price auction model, which generally speaking, is similar to winning something on eBay. For example, if the highest bidder bid $5 for an ad, and the second highest bidder bid $3 for the same ad, then the highest bidder would pay $3.01 — just a smidge more than the second highest bid. Now, however, what someone bids is what they pay. Because Google is so critical to how digital ads are bought and sold, the implications of the change will be felt across the industry.
“Moving to a first price auction puts Google at parity with other exchanges and SSPs in the market, and will contribute to a much fairer transactional process across demand sources. The move also provides significantly greater information transparency to both advertisers looking to understand their working media dollars, and publishers looking to assess the fair market value of their supply.”
- Scott Mulqueen, VP Programmatic and Data Product Operations, Trusted Media Brands
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