Demystifying Auction Dynamics for Digital Buyers & Sellers

Demystifying Auction Dynamics for Digital Buyers & Sellers

At AppNexus, we frequently field questions about the impact of auction dynamics from both buyers and sellers. The great debate, “Which is better for my bottom line: a first- or second-price auction?” has raged at industry events and company meetings, and in the press. Our own CEO has opined on the subject.

According to auction theory, auction type should not impact seller revenue, and yet, we consistently see buyers using other DSPs bidding more than they need to win in first-price auctions. As a result, first-price auctions still offer publishers a significant upside.

AppNexus’ investments in bidding technology, however, have placed our buyers ahead of the curve. For buyers using our Bid Price Optimization algorithm, auction type does not impact seller revenue.

So the answer to the question is: it depends... on whether you are a buyer or a seller, as well as on the innovation and advancement of your technology provider.

We show you the evidence in the following pages.