Aug 03, 2022
In Education Forum
With this move, the company strives for a fairer and more transparent market, but also has other interests in it. In this article I will discuss what this change entails, the reason behind the change and the possible consequences for advertisers and publishers. What does first price and second price mean? Google has grown with digital advertising sales. One of the reasons why this ad has been so successful is the checkout method. Advertisers bid on available advertising spaces through an auction via automated systems. The advertiser who wins this auction pays a price. This price can be calculated in two ways: first price and second price. Second price According to this checkout model, the price you pay for an advertising display is not the price you bid, but the second-highest price bid, plus one cent. An example: if advertiser Anton bids €15, advertiser Bert bids 8 and advertiser Christine bids 3, Anton wins job function email list the auction. The price that Anton has to pay for the ad impression is then not 15, but 8.01. The second highest price, plus one cent. Advertiser bid Pays Anthony 5 8.01 Bert 8 Lost Christine 3 Lost Now the attentive reader will immediately notice that it is possible to bid higher relatively safely than you actually want to pay in order to win as many impressions as possible. You generally do not pay the full price (bid price), but the 'market price'. It is important in this concept that all advertisers bid simultaneously and that all advertisers are equal (so there are no advertisers who have priority or who enjoy a discount). The reason why I quote this will become clear later in this article. first price In first price auctions, the winning advertiser pays the full bid price. I can clarify this with another example. The advertisers still offer the same, only the price that the winning advertiser (Anton) pays is now different.