Simplifying mobile app advertising: Moving to a first price auction

April 27, 2020

Tags: DSPs, Industry Perspectives, Publishers

Casie Attardi Jordan
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October 6th 2020 Update: MoPub has now transitioned all publisher inventory to a unified first price auction.

For the last several years, MoPub has been working towards simplifying how mobile app ads are transacted. Today, we’re announcing another step in this journey with our intention to transition all publisher inventory to a unified first price auction in the coming months. By evolving all of our auctions to a single first price, we can help reduce complexity and create a fair and transparent mobile app ads ecosystem for publishers and buyers.

Over the years, the mobile app advertising landscape has grown into a very complicated ecosystem where a single ad can pass through a mix of publisher set-ups with different rules before reaching an end user. This complexity has made it increasingly hard for buyers to accurately value mobile app supply. It has also caused app publishers to create operationally complex monetization set-ups that take time to manage and don’t necessarily yield maximum revenue potential. 

Our Advanced Bidding solution, which allows ad networks to bid alongside DSPs in real-time for the same impression, was a first step in getting the app ads space to a more simplified state. We believe that a first price auction, with all demand sources bidding in real time, will allow mobile app advertising to reach its true potential for buyers and publishers. 

With a single unified first price auction, no buyer’s bids will set the price for another buyer. The buyer that wins the auction pays the price they bid.

A second price auction made sense for the early days of mobile app programmatic, as buyers found their “sea legs” and learned how to value mobile app supply. Now, as real-time bidding has become more prevalent and buyers have become increasingly sophisticated, it makes sense for the ecosystem to transition to a first price model. Publishers will benefit from simplified ad operations set-ups, and buyers will benefit from a more accurate and sustainable approach to valuing inventory.

MoPub demand partners and publishers will have time to prepare over the next few months. The change to a first price auction will require buyers to adjust their real-time-bidding strategies. However, many buyers are already bidding into first price auctions on other exchanges, so the adjustment work should be minimal. Publishers won’t need to take any action, but they should start to think about how they can simplify their waterfalls and take advantage of the time savings. 

Beginning in June, we’ll be slowly incrementing the proportion of auctions that run on first price over the coming months. We’ll begin with transitioning auctions from those publishers taking advantage of Advanced Bidding, and follow with all remaining auctions. As we approach the June launch, we’ll provide more details and resources to help with the migration. In the meantime, please reach out to your MoPub contact if you have any questions.

October 6th 2020 Update: MoPub has now transitioned all publisher inventory to a unified first price auction.

About the author: Casie Jordan, Sr. Director, Professional Services & Partnerships

Casie leads the Global Professional Services & Partnerships teams for MoPub. Casie joined MoPub in 2014 and tweets from @kcavery. Prior to MoPub, Casie held management positions at Adobe and Operative Media. She proudly hails from the Jersey Shore, loves the Olympics, and looks forward to Halloween each year.

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