FYI: First-Price Unified Auctions in Google Ad Manager

Brian Blondy, May 16, 2019

Starting in May 2019 and rolling out in full in August 2019, publishers will begin using new unified pricing rules and data sharing for first-price auctions on Google Ad Manager

The changes will have an enormous impact on the way publishers sell and advertisers buy inventory through Google’s programmatic ecosystem. 

Here is a summary of how inventory is sold today and how it will be purchased as a standard in the near future with the arrival of first-price unified auctions in Google Ad Manager.

RTB Auctions – May 2019

  • First, a second-price, real-time bidding auction runs for authorized buyers from either Google Ads, Display & Video 360 and other DSPs.
  • Second, a first-price auction then compares the winning price from the second-price auction with a publisher’s guaranteed and non-guaranteed advertising campaigns and bids from exchange bidding buyers.
  • The highest bid from all of the auctions wins.
  • Publishers are entitled to set different floor prices for each of the demand sources that they are working with.
  • Publishers are entitled to set an unlimited amount of rules for each interested buyer.
  • Authorized Buyers are not required to share and receive bid data.

TimelineExpected May – June 2019

  • 1% of the Ad Exchange traffic is revised first-price auction format. Only unified pricing rules will apply to first-priced bids.
  • Google is recommending that publishers begin recalibrating their current pricing strategies and rules as soon as possible to ensure desired floor prices are respected during the leadup to first-price unified auctions.  If unified pricing rules are not created for certain types of inventory (subscribed users, premium articles), your impressions on this inventory run the risk of being sold without a floor price in Q3 2019.
  • 5% of Ad Exchange traffic will participate in the first price auction. (June)

Unified Pricing Rules – Expected August 2019

  • Rolling out in stages throughout the summer, unified pricing rules enable publishers to control a single, unified price for their inventory across all indirect demand sources within Google Ad Manager. All inventory will now compete in a single-stage auction with consistent rules and pricing across all channels. 
  • Google’s decision to move towards unified pricing rules aims to assist publishers to easily manage and to reduce the complexity of their website’s floor prices for all non-guaranteed bidders across all indirect sources of demand.
  • First-price auctions is an adjustment to better respond to a digital ad ecosystem, which is increasingly shifting towards first-price auctions and a model where consistent pricing rules will govern all sources of demand. Google believes that first-price unified auctions create a fair and transparent market for advertisers and publishers.  With the changes, first-price auctions are now the de-facto buying method for the programmatic industry as major ad exchanges already support first-price auctions.

TimelineExpected August 2019

  • All Ad Exchange traffic will participate within the framework of the new auction dynamics – unified auction plus first price auction.
  • Open Auction pricing rules will no longer apply to any percentage of Ad Exchange traffic, and only unified pricing rules will be employed.
  • From August 2019, publishers will not be able to set different floor prices for different buying platforms after the transition. 

Unified Pricing Rules – August 2019

  • Exclusive to display and video inventory (includes publishers guaranteed campaigns, all non-guaranteed bidders, authorized buyers and everyone else – at once).
  • Open Auction via Authorized Buyers (formerly known as Ad Exchange).
  • Private Auctions (both optimized and non-optimized).
  • First Look Demand.
  • Third-Party exchanges that participate in Exchange Bidding.
  • Non-guaranteed line item types Price Priority, Network, and Bulk (Beta).
  • Bids from publishers’ guaranteed campaigns.
  • Non-authorized bidders will have the same opportunities as authorized DSPs. 
  • Google will not have last look opportunity to pay just above the winning bid after an auction to win the impression. 
  • With a unified first-price auction, Google, like all bidders, will pay the full bid amount (minus fees).
  • Does not affect auctions for Search, YouTube, AdSense for Search or other Google property inventory.

Floor Price Strategies and Rules – Expected August 2019

  • Publishers are limited to setting more than 100 rules at a platform level for each interested buyer (including Google).
  • Large publishers often prefer to use hundreds of different rules for each buyer to ensure price consistency and unique pricing to each demand source across their portfolio of programmatic and direct deals.
  • Google has recently stated that it is open to exceptions and willing to change the allowed limit if during testing they find that it is too low throughout summer 2019.
  • Publishers should focus on determining the true value of their inventory and adjust pricing reflective of their existing advertising deals and how buyers are actually valuing their inventory rather than pricing how they believe that it should be valued.

Reporting and Data SharingExpected August 2019

  • Both publishers and advertisers will have to share and receive bid data.  More bid data will be shared with publishers and advertisers than ever before.
  • Publishers will be exposed to an aggregation of data from opted-in buyers as well as deeper visibility into each type of auction to give more in-depth analytics for pricing strategies.
  • Publisher pricing from non-guaranteed advertising sources will not be shared with buyers before they bid in the auction.
  • Publishers will now have the ability to receive reporting on all bids submitted by buyers from Google Ads and Display & Video 360.
  • Both Authorized Buyers and Exchange Bidding buyers will both be able to see the winning prices for auctions they participated in.
  • Greater transparency, operational simplicity, and more informed bidders. Buyers receive more pricing insights (data) in order to more effectively evaluate a publisher’s inventory.