A small percentage (3% or less) of Ad Exchange traffic continues to be governed by the second-price auction model for a short time in order to monitor performance.
How is First Price & Second Price Auction Different?
Second Price
Bidder 1: $1.00
Bidder 2: $2.00
Bidder 2 wins but pays $1.01First Price
Bidder 1: $1.00
Bidder 2: $2.00
Bidder 2 wins and pays $2.0Same as 2nd price auction, when the Unified floor is above the 1st price, revenue is impacted. (CPM = $0)
Simple Indirect Auction
With a single layer, 2nd Price Auction works efficiently.
Buyers bid the maximum they are willing to pay, knowing that impressions will clear just above the second highest bid
Ever-increasing complex ecosystem
Header bidding
Exchange bidding
Typically all DSP and RTB buyers will go through a comprehensive testing phase, where an optimal volume or QPS threshold is agreed by both parties. Normally the higher the volume of requests sent, the higher the buyer latency will be.
After the agreed QPS threshold is agreed, throttling will take place on the advertising exchange side. For example should a DSP not be able to return valid (200) responses the advertising exchange can throttle volume.
Strong bids losing to weaker bids due to mix of 1st and 2nd price auctions.
Highest: $6; Winning $4; Paid $3
Floors preventing highest bid from winning.
Highest: $7; Winning $4; Paid $3
Setting UPR Rules | What Changed?
Priority Levels no longer apply
Instead, rules with higher price applies.
Preview of Affected Line Items
Unified Pricing Rules
Watch out for False Signals
AdX Coverage - % of bids won from all the impressions where DA participated. Therefore, there are impressions that they did not bid which are not factored in this %.
RUN REPORTS - coverage MTD
Run a historial per ad unit report comparing day to day performance
Total Metrics: Total Rev, Imp, Ave eCPM
AdX Metrics: AdX Rev, Imp, Ave eCPM, AdX Impressions %
Run a historical ad unit line item report to benchmark % going to each LI type
Total Metrics: Total Rev, Imp, Ave eCPM
From the exported raw data, create the following reports
Ad unit DFP and AdX Performance Report by Day
Ad Unit Line Item Type Report by Day
Ad Unit Line Item Type eCPM by Day
Ad Unit Rev & Imp SOV %
Choose between a hard floor or a target CPM
Target CPM can earn you more revenue over time by adjusting floor prices to match more bids. Floor prices on individual bid requests can be either higher or lower than the target CPM you indicate. Average CPM for your inventory, however, is equal to or higher than the target CPM.
For Flex Rules ad units, Summer series suggested a hard floor per size instead of target CPM, this is something you can explore
Unified Pricing Rules apply across all indirect demand
Setting floor too high could lead to unfilled impressions
Line Item Troubleshooter: New Rejection Reason - “Below Pricing Rule floor”
