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How the Ad Exchange Figures into a First-Price Model

Programmatic auction dynamics are changing, with a simple, first-price model rapidly replacing the second-price mechanism on which real-time bidding was built.

Once the first domino fell, and AppNexusRubicon, and Index Exchange began pushing auctions to the first price, it became a market imperative for all SSPs to follow suit in order to sustain a competitive landscape. In accordance with this market shift, Sovrn is also ramping up support for the first-price model and expects most of its auctions to be first-price by the end of this month.

And like most exchanges, Sovrn offers an estimated market rate program to help bidders who can’t support first price bidding transition to this new model.

So, what is behind this seismic shift from second to first-price auctions, and how will this evolution impact the position of ad exchanges within the digital supply chain? 

 

Read the whole article here: The Ad Exchange’s Place in a First-Price World

Source: MarTech Series

Article length: 863

Article reading time: less than 6 minutes

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