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Google Ads Exchange will move to first price auction

3/6/2019

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With Google moving to a first price auction, programmatic buyers will need to rethink their approach to bidding. It's most likely that media buying tools will do the heavy lifting. Demand Side Platforms, if not already done, will incorporate bid shading as a default features to find the proper inventory pricing. DV360 already does this since auctions previously moved to first price already.

Publishers, on their side, can expect a very brief lift in revenues while buyers readjust their strategies / until bid shading becomes a feature in DSPs. The total amount of money spent won't change, so it will be interesting to witness how the budget will flow across the available supply in a first auction model.

However, the most significant impact is not something that is written, yet entirely implicit in the story. The move from 2nd price auction to a 1st price auction removes arbitrages/optimizations opportunities on the sell side. This will pressure some players in the supply chain to change their approach and come up with new offerings/deals.

​Complete transition is set to be completed by the end of the year.

Useful Links : 
https://www.blog.google/products/admanager/simplifying-programmatic-first-price-auctions-google-ad-manager/
https://adage.com/article/digital/google-adx-moving-a-price-auction/316894/
https://adexchanger.com/online-advertising/google-switches-to-first-price-auction/

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    Jonathan Brunelle is an Pragmatic E-Commerce Optimization Strategist who Generating Value From Digital Platforms

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