Hulu First-Price Auctions
https://adexchanger.com/digital-tv/hulu-moves-to-first-price-auctions-for-its-ott-inventory/
Hulu recently moved to a first-price auction to sell its premium video inventory. The private bidding market has started to sell its deals to the highest bidder on October 14th. This new market place which was established in the beginning of the year hopes to make it easier for advertisers and partners to control their buys. In addition, they hope to increase transparency and believes that the first-price auction is more suitable from the emerging premium inventory market in comparison to the traditional remnant inventory.
Over the past few years media platforms have seen the inefficiency of using second-price bidding as it did not necessarily reflect the actual value of the inventory. In doing so, the article comments that several tech companies have been shifting to using first-price auction from second price bidding. For instance, Amazon’s SSP and Google SSP ad manager have implemented the first-price auction for their OTT inventory. Due to this change, eMarketers estimate that Hulu’s advertising revenue will increase by 25% this year.
This topic relates to the topic of first-price auctions. First price action is when bidders submit simultaneous bids to the seller and the highest bidder wins. In this process the winner also pays the highest bid. We can also argue that the shift from second-price bidding to first-price bidding reflects the topic of networks of information. The emerging trend of this change is a reflection of information traversing the network in big media companies. The impact of one big tech companies could reflect changes to many other tech companies in a directed path.