Google outlines move to first-price auction for Ad Manager

Google joins rest of major exchanges in move to first-price auction

In March, Google announced it will be moving to a first-price auction model for its publisher exchange and ad server Google Ad Manager by the end of 2019.

Today, Google shared updates on what that transition will look like.

Currently, Ad Manager can run two different auctions for an ad. A second-price, real-time bidding auction runs among Google's authorized buyers, which could include Google Ads, Display & Video 360 and other demand-side platforms.

That's followed by a first-price auction, which compares the winning price from the second-price auction with a publisher’s guaranteed and non-guaranteed ad campaigns, as well as bids from Google's exchange bidding buyers.

Now, Google will shift to a unified first-price auction to reduce this number of steps and increase transparency.

Ad Manager will have one auction that compares prices from a publisher’s guaranteed campaigns with all of a publisher’s non-guaranteed bidders, whether they're authorized or non-authorized DSPs.

In the current set up, a buyer could place a winning bid in the initial auction but lose out if it didn't participate in the final auction. Now all bidders will compete at the same time.

The update will also require all Ad Manager partners to share and receive bid data.

Google's director of product management Jason Bigler wrote in a blog post: "This change will allow us to provide publishers reporting on all bids submitted for their ads (including bids from Google Ads and Display & Video 360) and give all Authorized Buyers and Exchange Bidding buyers access to the price that was needed to win for auctions they submitted a bid to."

Google will also be moving away from last look bidding, which gave AdWords and Google's other ad platforms the ability to put the final, winning bid on inventory after an auction. Now Google will join all other bidders in the unified, first-price auction.

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