As of March 31, Nativo is officially transitioning to first price auctions in order to provide increasingly transparent, market-based auction dynamics.
Second price auctions emerged to safeguard buyers in a landscape lacking a robust buying pool; however, soft floor strategies limit how buyers can validate that they are paying a true second price. In today’s programmatic ecosystem, the majority of impressions have multiple bids. With first price auctions, greater transparency and pricing reflect the true market value of impressions. First price auctions, which maximize win rate and minimize clearing price, enable bidders to accurately model spend as there is no variance between bid and win price.
Buyers and publishers alike stand to yield better insight and visibility into more accurate market impression value. As historical data effectively levels a fair bid price, rates will normalize. The result? Buyers pay an optimal price for inventory aligned to campaign KPI goals. Most importantly, buyers benefit from increased transparency, paying exactly what they bid versus the limited visibility in a second price auction, where clearing rates are contingent on other demand. Meanwhile, increased transparency will afford publishers better inventory valuation, allowing them to simplify yield optimization and manage pricing strategies.
As first price auctions have become increasingly prevalent, most DSPs have updated their bidder logic to optimize bidding strategies and minimize clearing rates without compromising fill (often referred to as bid shading). Contact your DSP to ensure these mechanics are in place.
For more information on first price auctions, contact your Nativo representative.
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