The mobile app programmatic ecosystem is slowly but surely transitioning from second price to first price auctions. Some exchanges like AdColony, Google AdX, Samsung and others are already using first price auctions while some others like MoPub have started to gradually move to first price auctions from Q2 2020.
Many programmatic traders are used to set up bidding strategies considering a second price auction mechanism. In order to enable seamless adoption to first price auctions, we are happy to announce two latest improvements.
1. Max CPM Bid selection for different auction types- We already supported having a max CPM limit for second price auctions (2PA) (previous release note link) since even in second price auctions many players don't run a fully fair auction and a lot of auction gaming does happen. Building on this feature, we have now released the ability to set different max bid CPM prices for 1PA (First price auctions) and 2PA (Second Price Auctions) and enabling users to have more control of their bidding strategy.
For instance, as a campaign manger, you might want to have a higher bid limit for 2PA (since your win price is <= bid price) but keep a lower bid limit for 1PA (since in 1PA, you pay what you bid)
2. Bid Optimization- Even before bid shading became a hot topic in ad-tech, we were enabling our customers to use a Bid optimization model to circumvent auction gaming that happens in the ecosystem. The bid optimization (bid shading) algorithm is responsible for optimizing the eCPM by looking at various parameters like OS, publisher app, country, etc and tries to change the bid CPM to achieve a specific win rate.
With this feature, users now have an option to enable Bid Optimization algorithm for specific auction type. For instance, a user might want to enable Bid Optimization algorithm for 1PA so as not to overbid too much while disable it for 2PA to get more scale
Note: If you already have campaigns where Max bid (CPM) is enabled, the existing limit will be applied to 1PA as well. You may want to revisit such campaigns to further optimize your 1PA strategy.