As online advertising has matured, programmatic buying has become an increasingly complex process. Google is planning to simplify the bidding process by transitioning to a unified first price auction.
Most of the ads you see online appear because they “won” an auction.
In the very early days of programmatic buying, publishers typically used only one auction to sell their ad inventory. Today the programmatic ecosystem has evolved into a much more complex marketplace where a single ad can pass through a mix of over ten different auctions, with different rules, before a winning bid price is selected and an ad is served.
This multi-step process creates complexity as it is hard for advertisers and agencies to “properly value programmatic inventory,” while publishers and app developers are forced to “implement increasingly complicated ad monetization strategies.”
Further, the increasing intricacy of programmatic has made it operationally very difficult, even for experts, to determine what’s going well and what needs to be improved.
To simplify programmatic for partners and “create a fair and transparent market,” Google Ad Manager is moving publisher inventory to a unified first price auction. This change only impacts display and video inventory. It does not affect auctions for Google Search, AdSense for Search, YouTube, and other Google properties, or advertisers using Google Ads or Display & Video 360
An advertising buyer’s bid will not be shared with another buyer before the auction or be able to set the price for another buyer. The buyer that wins the auction pays the price they bid. By simplifying our auction in Ad Manager, we can help make it easier for publishers and app developers to manage and get fair value for their inventory.
This transition is taking place over the coming months, and should be complete by year’s end. Google will start testing in the upcoming months after partners have had time to adjust buying and selling strategies.
During this time, publishers and app developers will need to rethink how they use price floors and technology partners will need to adjust how they bid for Google Ad Manager Inventory.