Google is switching AdSense to first-price public sale to allow higher coordination with different advert exchanges
Here is an important point for those who use Google AdSense: The platform will be switched to a first-price auction model “in the coming months”, which will bring AdSense in line with Google’s other advertising offerings and at the same time allow Google to compete better with others compete with advertising exchanges.
Not sure what a first price bid model is?
As explained by Google:
“In the early days of online display advertising, advertising space was sold to advertisers in a second-price auction, in which the final price of the winner was determined by the amount of the second-highest bid. Over time, many ad sales platforms in the display advertising ecosystem, including Google Ad Manager and Google AdMob, have switched their auction to first price. In the case of a first price auction, the final price reflects the knockdown. “
Currently, for example, with AdSense bids, the final price of each ad is 0.01 C higher than the bid for second place. So if two brands bid $ 5 and $ 6, respectively, for an ad slot, the winner will end up paying $ 5.01. However, on a first-price auction model, the winning bid would be the full highest bid – so the advertiser would pay $ 6 for the impression.
As Google notes, it has already switched some of its ad products to the first price system, while most of its competitors have switched to header bidding as well.
That will likely mean more revenue for publishers and Google – although Google says the actual impact will be limited.
“Due to the dynamic auction environment, we cannot predict how certain AdSense publishers will perform. On average, however, we expect the effects of switching to a first-price auction on AdSense publishers’ earnings to be neutral overall. When Ad Manager switched to a first price auction, publisher income was on average neutral to slightly positive.”
Given that various other platforms and exchanges have already made the switch, it makes sense for Google to update its approach as well. While Google expects the impact to be minimal, it is important for AdSense buyers to keep in mind how you structure your bids and plan your spend.
You can read more about the upcoming update here.