Demand-side Platforms Auctions
Programmatic demand-side platforms are advertiser campaign management products that allow advertisers to buy ad placements online. In the past, they have always been conducted using the policies of second-price auctions, where these demand-side platforms would bid for the opportunity to put up an advertisement. This is beneficial in the sense that the sellers would be able to gain a maximum yield and maintain the reasonable pricing for demand-side platforms. As we learned in class, the dominant strategy would be for the buyers (demand-side platforms) would be to bid their true value for the inventory, so the sellers would be able to gauge how much their worth. However, there may soon be a change from second price auctions to first price auctions instead. This actually further balances the competition across the inventory.
I think it’s interesting to see how these concepts of first price vs second price auctions apply to the real world outside of the most basic examples. Whenever reading through the problems about auctions and learning these concepts, I would only ever imagine a bid on ebay or an auction for wealthy art collectors. Demand-side platforms using auctions to get advertisement opportunities is just one of countless ways where auctions are used in the world today, and it’s interesting to note that not all things are simply as black and white as buying and selling.
https://www.martechadvisor.com/articles/ads/to-bid-or-not-to-bid-that-is-the-question-for-dsps/#