Case Studies

Google’s unified first price auction update from a publisher’s perspective

It’s been a while since Google introduced changes in its product, but the concerns surrounding unified pricing still exist. We try to answer the most common questions regarding unified price auction update.

What are unified auctions?

A unified auction allows various ad exchanges to have equal access to publisher inventory and compete under one set of price rules. Sounds a lot like header bidding? Both models are aimed to benefit publishers similarly – by driving up inventory prices. In Google’s new unified auction is the first-price auction, which means that the winning exchange will pay for inventory the amount it bid. If you follow our news section you probably came across our article explaining the difference between first-price and second-price auction.

What does it mean for header bidding?

The end of the header bidding era is one of the most popular myths around the first-price auction. But header bidding isn’t going anywhere and most of the positive impacts for publishers it has will remain. While unified, first-price auctions indeed limit its ability to push AdX performance, it still allows publishers to seek better demand competition outside of Google’s ecosystem.

How will all of this affect the revenue?

In the long term, the change should help publishers increase yields and gain access to more bid data. However, many are worried that it will also overturn their current pricing strategy and leave them with less control over their ad inventory. The actual impact the change will have on the ecosystem depends on how quickly both sides (buyers and sellers) will adapt their strategies to the new model. Likely publishers will experience some unexpected eCPM fluctuations within the first few months after the change will roll out.

What should be done?

Googles’ shift to a unified, first-price auction will require publishers to rethink their floor-pricing strategy, as the impact of the floor prices created to influence the second price auction closing will no longer be relevant. Most of all, new pricing should base on existing advertising deals and the true value of their inventory.

The “new order” also brings publishers necessity to re-evaluate their relationship with SSPs. While networks with a high bidding performance and unique demand will always be valued, for others it may get harder to find a place in the market.

For those publishers who aren’t ready to take on the challenge of adapting to the new model, it may be the right moment to consider external help. Delegating your yield optimization to an experienced team of experts will secure your earnings and provide an immediately noticeable uplift.

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