Google AdSense Changes to First-Price Auction
October 19, 2021
Google announces that they will change the AdSense auction from Second-price to First-price very soon. Google claimed that this action needs no extra efforts from both buyers or publishers, just sit down and enjoy as usual.
In the existing bidding mechanism (Second-price Auction), the final price paid by the winner is decided by the second highest bid.
It seems not fair to those who are willing to pay higher for the ad space. It is also inundated with hidden fees and can be manipulated to match to the final auction numbers.
With the change of First-price auction, the game is different.
It removes any obstacles and shows a very clear picture as the winner is going to pay for the exact amount that is originally offered in the transaction.
This is a good chance to increase the win rate from buyers. They will see such changes eliminating the risk of missing bids because of lower bids from competitors. It results at the final auction which will be the same as the original bid value. Finally, it comes to an outcome that is equally beneficial for both publishers and advertisers.