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I don't fully understand the mechanics either, but one point of clarification that might help. > - "Google allegedly dropped the second-highest bids" >> - So p

I don't fully understand the mechanics either, but one point of clarification that might help. > - "Google allegedly dropped the second-highest bids" >> - So publishers still got paid the highest bid? During the relevant period and until end of 2021, Google is running a second price auction. The highest bid wins and then pays the second highest bid.

dillondoyle 5y ago
Yeah that's what I wrote in the later part the $10,7,5 example I thought might be the case. If that's the flat out only thing literally happening, I can't think of a reasonable reason that would be in the best interest of the publishers paying google to sell supply side. it's all jumbled when you control all sides of the auction and infrastructure which is the real problem IMHO. Maybe I can see a scenario where bid shading is conflated here a bit or at least complicates the scenario. For instance 'drop' the 2nd bid maybe means placing a lower bid instead of 'deleting' one. all DSPs have a good sense of what will win the auction and offer bid shading to buyers. Just trying to think through that line of thought. For instance I buy political ads. Google knows that video inventory X usually sells for $30 CPM, but my settings have $50 CPM max bids because during the election it's hard to get scale sometimes. my DSP would bid shade lower to say $30.01 on that individual impression, and if I happen to be the 2nd price maybe that is 'drop' they are refering too? IDK i don't think traditional news media reporting here will ever give enough information / they understand enough
- waterloosong 5y ago
  fair enough, reverse engineering media reporting on legal documents can be tricky You need to realize just one more thing: to ensure that there is no peeking into bids of other networks, the actual code of the auction could be executed on a remote server. But only a naive implementation would ask every ad network client to send all their ad bids to the server; on the other hand having ad networks send only the highest bid would not be enough for a second-price auction...
  - dillondoyle 5y ago
    oh i haven't thought of that. maybe that is what they could mean by 'drop the second price.' adx ssp sends 1 bid of $10, even though their next highest internally is $9 mopub ssp or whoever sends 2 bids of $5 and $7 So if nytimes.com is doing a header bid on their own (or even through google's ad serving product - again imho the biggest problem) they don't see the $9 and the clearing price becomes $7.01 I guess it would be a question of contracts. This is beyond what I do so I have no idea what the standard number of bids each SSP sends to a header bidding auction, obviously don't want to send google scale 1 billion lol...

dillondoyle 5y ago

Yeah that's what I wrote in the later part the $10,7,5 example I thought might be the case. If that's the flat out only thing literally happening, I can't think of a reasonable reason that would be in the best interest of the publishers paying google to sell supply side. it's all jumbled when you control all sides of the auction and infrastructure which is the real problem IMHO. Maybe I can see a scenario where bid shading is conflated here a bit or at least complicates the scenario. For instance 'drop' the 2nd bid maybe means placing a lower bid instead of 'deleting' one. all DSPs have a good sense of what will win the auction and offer bid shading to buyers. Just trying to think through that line of thought. For instance I buy political ads. Google knows that video inventory X usually sells for $30 CPM, but my settings have $50 CPM max bids because during the election it's hard to get scale sometimes. my DSP would bid shade lower to say $30.01 on that individual impression, and if I happen to be the 2nd price maybe that is 'drop' they are refering too? IDK i don't think traditional news media reporting here will ever give enough information / they understand enough

waterloosong 5y ago
fair enough, reverse engineering media reporting on legal documents can be tricky You need to realize just one more thing: to ensure that there is no peeking into bids of other networks, the actual code of the auction could be executed on a remote server. But only a naive implementation would ask every ad network client to send all their ad bids to the server; on the other hand having ad networks send only the highest bid would not be enough for a second-price auction...
- dillondoyle 5y ago
  oh i haven't thought of that. maybe that is what they could mean by 'drop the second price.' adx ssp sends 1 bid of $10, even though their next highest internally is $9 mopub ssp or whoever sends 2 bids of $5 and $7 So if nytimes.com is doing a header bid on their own (or even through google's ad serving product - again imho the biggest problem) they don't see the $9 and the clearing price becomes $7.01 I guess it would be a question of contracts. This is beyond what I do so I have no idea what the standard number of bids each SSP sends to a header bidding auction, obviously don't want to send google scale 1 billion lol...