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by keithwinstein 998 days ago
No -- in 2019 Google Ad Manager announced it was moving to a first-price auction (https://blog.google/products/admanager/simplifying-programma...) and AdSense followed in 2021 (https://support.google.com/adsense/answer/10858748?hl=en). (Edit: With regard to Google Ads for Search, they no longer seem to commit to any particular algorithm for deciding what price gets paid.)

There are some lawsuits that allege that Google was effectively cheating before then, by sort of manufacturing a shill bidder, with privileged access to everybody's bids, that turned it into something closer to a first-price auction (https://www.wired.com/story/google-antitrust-ad-market-lawsu...). The quotes from within Google look pretty bad, e.g. one Googler allegedly wrote: "Doesn’t that undermine the whole idea of second price auctions? I.e., the assurance that you can bid the maximum you’re willing to pay with no negative consequence. But if the publisher manufactures a floor based on your bid to get you to pay more than the second price, this principle gets violated. It’ll transform the system into a 1st price auction where the bidder has a strong incentive to bid LESS than he’s willing to pay. (Only just enough to win.) I don’t think that’s desirable for either side in the long term."

Google... disputes this (https://blog.google/outreach-initiatives/public-policy/ag-pa...). I guess we'll see.
2 comments
eastbound 998 days ago
Not a googler, but it sounds important that ads compete against no-ad bids.

Example: On search results, if all bids are 0.01$, then it’s worth showing no ad, because it will annoy the customer to have low-relevance ads. But what is the ceiling? 0.10$? 1.00$? Sounds reasonable to have a ghost bid which represents the weight of customer fatigue.

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prepend 998 days ago
It’s hard to believe that google cares about customer fatigue as the search results are littered with ads.

I think the issue that the floor varies depending on google sets and there’s no visibility to how they do this.

If there’s only one bidder and the minimum price is $1 for one ad but $0.10 for another, why is that? It’s because google knows that one person can pay $1 while the other won’t.

It hasn’t been a proper auction for many years and is really just whatever google wants to charge. Because they have monopoly pricing power, customers don’t have any real alternatives to search ads.

It would be like if there was one magazine that had 90% of all readers and they charged whatever prices they wanted.

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josefresco 998 days ago
> It’s important to note that our move to a single unified first price auction only impacts display and video inventory sold via Ad Manager. This change will have no impact on auctions for ads on Google Search, AdSense for Search, YouTube, and other Google properties, and advertisers using Google Ads or Display & Video 360 do not need to take any action.

No impact on Google Search - is that still the case?

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