A couple of weeks after the Google migration to 1st Price, read about Adomik observations.
Adomik, 10th October 2019
Google Move to 1st Price started on the 10th of September 2019. The full migration to 1st price, from 40 or 50% to (close to) 100% happened on the 26th of September 2019.
Further to our first analysis and initial observations, posted on the 26th of September, we note that there are no major changes since the move from 15% to 40 or 50% of first price impressions.
In late September, the revenue generally stabilized and the CPM evolution is now staying flat. We can still notice a slight increase in volume.
While GAM remains in a strong position, Header bidding weight is not evolving much overall. However, we can see that the weight of some SSPs in the header is changing significantly.
Adomik’s general view is that Publishers have been cautious with Unified Pricing Rules, avoiding “high” floors that would have cut impressions and created a strong increase in CPM.
Furthermore, we can already see some specific buyers starting to “shade their bids”.
These analyses remain early observations still to be confirmed over time. We foresee that most of the bid shading impact will be visible in the coming weeks.
During the Google transition to 1st Price, below are Adomik first findings mid-way during the migration.
Adomik, 26th September 2019
Google Move to 1st Price started on the 10th of September 2019 and is ongoing still
The Google Transition to 1st price auction is underway. The migration started on the 10th of September, and this transition is being overhauled. The Adomik team of experts have been advising their publisher clients over the past few months, in order to help them understand and anticipate the impact of the migration on their inventory, carry out pricing simulation, and also to adapt their Pricing rules to match the new Unified Pricing Rules.
What are the first findings midway and just a few days after the start of the transition?
Given the fact that Google does not simply allow us to isolate the traffic under 1st price auction, it is not very easy for us to draw analyses and conclusions, as this requires a specific setup. We deployed this specific set up together with a selection of publishers worldwide.
Moreover, we suspect some bidders are probably not fully in a 1st price mode yet.
However, what we can confirm, is that at the beginning of the weekend 18th September, about 40% of Publishers’ inventory were now sold with 1st price auction and 60% were still sold with 2nd price auction; only a few Publishers remained below this percentage.
What can be seen on Adomik Publisher clients’ inventory?
What strikes us and is obvious, is a general rise in CPM for Authorized Buyers (Ex.: Google AdX) and header.
Generally speaking, what we see is an increase in revenue on the Authorized Buyers: higher CPM are to be seen. Moreover, we note a decrease in the relative weight of Header Bidding, despite the rise in CPM on the latter, and also a decrease in the Open Bidding (ex Google’s Exchange bidding).
What would be the reason in your opinion?
The extra income on Authorized Buyers does not specifically come from Google Adwords but from other buyers. We think that it is not only related to the 1st price auction but also to the replacement of the Pricing Rules by the Google Unified Pricing Rules. Indeed, the UPRs create constraints for Adwords. For instance, floors cannot be targeted on Buyers and Adwords specifically, or anonymous prices are disabled.
And there is more…
An interesting point we notice – but this still needs to be confirmed over time: if we compare auctions sold on 2nd and 1st price auctions on the same floor, the CPM on 1st price auctions is much higher and generates more income. So we could conclude that more revenue will be generated for Publishers once the migration to 1st price auction is complete.
Yet, when increasing the floor value, and still keeping an identical one in 1st and 2nd price auctions, the difference in revenue is no longer true.
Until we notice the following: if floors are set up too high, the 2nd price auction ends up creating more revenue than the 1st price. This is what we found out when digging the analysis more into details.
We conclude that this is most probably due to a “bid shading” effect. We had suspected this would happen. So our advice for publishers is to be vigilant and careful while setting up floor prices.