Google redirects AdSense to the first price auction to better align with other ad exchanges

Here’s one important thing for those using the Google AdSense platform to switch to the first price auction model ‘in the coming months’, which will align AdSense with other Google ad offerings and allow Google to compete better in its ad exchange.

Not sure what the first price bidding model is?

As Google explained:

“In the early days of online display advertising, ad space was sold to advertisers at a second price auction, where the final price paid by the winner was determined by the amount of the second highest bid. Over time, many display ad platforms in the display advertising ecosystem, including Google Ad Manager and Google AdMob, have switched their auction to the first price. At the first price auction, the final price reflects the winning bid. ”

For example, currently in AdSense bidding, the final price of each ad is 0.01c higher than the second-place bid. So, if two brands bid $ 5 and $ 6 for an ad slot, the winning bidder ultimately pays $ 5.01. Under the first-price auction model, however, the winning bid would be the full highest bid – so the advertiser would pay $ 6 per view.

As Google notes, it has already moved several of its ad products into the first price system, while most if its competitors have also switched to header bidding, so it makes sense for AdSense to get in line as well.

That is likely to mean higher revenue for publishers and Google – although Google says the actual impacts will be limited.

Due to the dynamic auction environment, we can’t predict how this will affect certain AdSense publishers. But on average, we expect the impact on AdSense publishers’ total earnings since moving to the first price auction to be neutral. When Ad Manager moved to the first price auction, there was a neutral to slightly positive impact on the publisher’s average earnings.

Given that various other platforms and exchanges have already made the change, Google makes sense to update your approach. And while Google still expects minimal impact, it’s worth noting for AdSense customers, given how you structure your bids and plan your spending.

You can read more about the upcoming update here.

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Naveen Kumar

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