AdSense is transitioning to a first-price auction model.
What is first-price auction
What is a First-Price Auction and how does it work? The first-price auction model is one in which buyers engage in the auction at the same time and the highest bidder wins the auction. At the end of the auction, the top bidder receives the exact price per thousand ad impressions (CPM) that he bid during the bidding process. The winning bid is referred to as the clearing price in some circles.
What is the reason behind AdSense’s transition to a first-price auction?
A first-price auction, which is common on display ad selling platforms, simplifies the purchasing experience for advertisers since the final price reflects the winning bid. While Google Ad Manager and Google AdMob have already transitioned to the first-price auction model, the company is standardizing the auction methodology across all three of its ad selling platforms to provide advertisers with a more consistent procedure across all of Google’s ad selling platforms.
Advertising spending confidence is growing across the display advertising ecosystem as a result of this, and publishers will profit as a result of an increase in advertising spending confidence over time.
What is the reason for this change in AdSense at this time?
Ad space was often sold to advertisers in a second-price auction in the early days of online display advertising, with the winner’s ultimate price decided by the amount of the second-highest bid. Many of the display advertising ecosystem’s ad selling systems, including Ad Manager, AdMob, and many third-party ad exchanges, have migrated to first-price auctions over time.
In a first-price auction, the winning bid is reflected in the final price. AdSense will switch to a first-price auction in the coming months. This will benefit advertisers by streamlining the way they purchase online ads and making it easier for them to purchase your AdSense ad space.
What AdSense products have been affected?
Only a few AdSense products will be affected by the switch to a first-price auction:
- Content-based advertising with Google AdSense.
- Video AdSense via Google
- Using Google AdSense in Video Games is possible.
This change has no impact on:
- search advertising with Google AdSense
- Shopping AdSense by Google
Is it necessary for me to take any action?
No. There is no need for you to do anything because these modifications will take effect automatically.
Do I need to make any changes to my advertising campaign?
No. The switch to a first-price auction will have no effect on the way you run your ads.
Will I be able to use all of the ad forms in the new auction if I participate?
Yes. This change will have no effect on the ad formats that AdSense currently provides.
Will this have an impact on my AdSense earnings?
We can’t say how individual AdSense publishers will be affected because of the dynamic auction environment. However, we estimate the transition to a first-price auction to have a neutral impact on AdSense publishers’ overall earnings. On average, the transition to a first-price auction had a neutral to slightly positive impact on publisher earnings.
