In a timely
announcement on March 6, 2019, Google announced that programmatic ad sales
through Ad Manager will be shifting from second price auction to first price
auction. In a first price auction the winner pays what they bid. In a second price
auction the winner pays what the second highest bidder bid.
Programmatic
display is the ability to automate ads for your target audience. Traditionally
sold in a second price auction, the changing landscape, complexity and nuance
of the advertising space has created a need for more accurate pricing.
Advertisers can purchase impressions for advertising space on chosen websites,
with the auctions happening in a fraction of a second.
In general with
this type of auction, clearing price will rise which will benefit the seller. However
it will also allow buyers to target their money at ads that are the most worth
it to them and yield the best results.
Google will be
giving time for bidders to adjust to the new market rules and necessary
technical requirements to adapt to the new auction format.
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