What is an ad impression
News from Google: Change from second to first price auction in the Google Ad Manager
By the end of 2019, Google wants to simplify programmatic advertising - and switch from the second to the first price auction. This applies to both display and video advertising. But what does this innovation mean for you publishers? And how do you prepare for it? We clarify - including important terms relating to the Google Ad Manager.
Advertise efficiently online: With Google Ad Manager
In June 2018, Google launched its new brand Google Ad Manager introduced - as an umbrella brand for two other in-house products, which you know as DoubleClick for Publishers and DoubleClick Ad Exchange. With that, the company has that Advertising business for publishers immensely simplified.
Now the next step is planned: Instead of the second price there is the first price auction. The change will make your life a little easier again and optimize your digital revenues. Before we take a closer look at this change, let's make a brief digression into the terminology of the Google Ad Manager.
What is the Google Ad Manager?
The Google Ad Manager is a platform hosted by Google. you delivers and manages online advertisementswhether on websites, mobile websites or in apps - and optimally tailored to your target group. For this you define yours inventory: These are entire ad spaces in your content, also called inventory. Since you control all of your advertising networks centrally, you have yours Click statistics at a glance at all times and you can steadily yours Optimize revenues.
You are wondering how the Price for your advertising space forms? It works like one auction: Several bidders “vie” for it by submitting their bids - as in any other auction. Exist in the moment different types of auctions, whereby Google has consistently relied on the second price auction to date.
Second price auction: what does that mean?
The Second price auctionAlso called Second Price Auction or SPA for short, is a bidding process in which the highest bidder wins the auction. However, he only pays that Second highest bidder's price plus EUR 0.01 for the ad impression.
An example of this: The highest bid in one Supply side platform - a platform that bundles incoming offers from advertisers for free advertising space, also known as Exchange or SSP - is 10 euros CPM (thousand-contact price) for the advertisement impression. In the same competition, the participant with the second highest bid bids 6 euros. The highest bidder wins the auction and can have his ad delivered at a price of EUR 6.01 instead of EUR 10.
Basically there are open and covert auctions: While every bidder knows the bids of the other participants in an open auction, the amounts are unknown in a covert auction.
First price auction: what does that mean?
In contrast to the second price auction (also known as the first price auction or FPA for short), the First price auction the Highest bidder the auction for itself and pays his actual bid - and thus the highest price offered.
An example: The advertiser offers 10 euros CPM for an ad impression. If he is the highest bidder in the same bidding process, he wins the auction and pays his bid of 10 euros.
This is a covert auction: The bids are submitted once, "secretly" and are not known to other bidders.
From second to first price auction: advantages for publishers
The development away from the second price auction started a few years ago when the Header bidding, based on pre-bid technology. Let's start with the definition of header bidding.
What is header bidding?
The Header bidding is a mechanism with which you as a publisher offer your inventory for sale on different programmatic marketplaces (exchanges) at the same time. As the name of this method suggests, an auction takes place in the head area of your platform.
The header bidding is based on the Pre-bid technology - the so-called Open source wrapper technology. Right at the beginning of your website loading, the pre-bid tags are called; the supply side platform you use contacts the profiles of the bidders and selects the highest bid. It forwards this value to the ad server.
Thanks to header bidding, several SSPs at the same time Participate in the pre-bid process by including their tags in the header of your online portal. Several exchanges bid and the auction takes place transparently. In this way, all advertising inquiries can access your media inventory. And you achieve higher CPM.
You can read in detail how header bidding is revolutionizing the advertising ecosystem in the whitepaper of the BVDW (Bundesverband Digitale Wirtschaft e.V.). Lots Marketers are already using the header bidding process. We at Traffective also use this technology on our monetization platform for publishers. As a certified Google partner, we are also always up to date with all Google Publishing products.
What does the first-price auction do for publishers?
Now the development towards standardized and simpler programmatic advertising is going one step further: Google plans to implement the first price auction in the Ad Manager by the end of 2019. The company wants to bring advertisers to fair competition. The change brings you publishers to First price auction some advantages With:
- the auction process in Google Ad Manager will be standardized;
- transparency for everyone involved increases;
- the programmatic marketplace becomes simpler and easier
- you get better prices for your display and video advertising space.
But the switch to the first-price auction also harbors possible insidiousness. This can lead to unnaturally high prices, which in turn can reduce the demand for your inventory. So that it doesn't come to that, there are a few on your side Precautions needed.
First price auction: This is how publishers prepare
It is obvious: the switch from the second to the first price will force both buyers and sellers to make some changes. These primarily concern yours programmatic strategies. You also have to adapt your offers for the Google Ad Manager Inventory and your current ones Check floor prices. Please note that the upcoming change will not affect auctions for ads in Google Search, AdSense for Search, YouTube and other Google products.
Our tip: If you are on a professional yield management technology (Yield Management) saves you time and effort. With the Traffective monetization platform for publishers, you have a full overview of your advertising revenues and are well prepared for all the new features in the Google Ad Manager.
Do you have any questions about the upcoming switch to the first price auction?Our experts will be happy to advise you!
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