What to know about Google’s implementation of first-price ad auctions
Google’s rollout date to shift from second- to first-price auctions for Google Ad Manager was scheduled to take place on September 10th, 2019. While most independent ad exchanges made the shift from second- to first-price auctions about a year ago, Google’s Ad Manager will be the last major exchange to switch to first-price auctions.
Switching to first-price auctions means that Google no longer has last look at the bids submitted before submitting its own bid. This “last look” gave Google the ability to pay a penny more to win the impression, which allowed AdWords and DSP buyers to boost their win rates and secure valuable inventory at favorable prices.
Moreover, this switch means an added layer of standardization to bidding strategies. For publishers, this means more bid visibility. They now have a better idea of who is bidding on their inventory, as Google will start providing data from all bids that publishers submit to their auctions. This will help publishers better evaluate the value of their inventory, and better understand bidding behaviors. Also, publishers can get in contact with buyers who may have not won an impression, but who they can try and work together with to see if there are other opportunities.
As Daniel Kim, programmatic trading director at iProspect UK, said, “[The switch to first-price auctions] could prevent buyers from over-valuing impressions and over-bidding on them, and get to a point where bids are better correlated to the value of impressions.”
From my understanding of the article, Google’s full switch to first-price auctions in this sense is good because it’s helping to unify the industry.
What to know about Google’s implementation of first-price ad auctions