Intowow

What Publishers Need to Know About Google’s Optimized Pricing

Google announced on June 5, 2022 that Optimized Pricing will be added to Unified Pricing Rules (UPR) in Google Ad Manager for all publishers. The feature sits on top of UPR to protect inventory value by automatically raising price floors when the algorithm detects they are too low, countering buyer bid-shading behavior. It changes bid requests by removing the last-look advantage and relying on publisher floors, enabling higher bids across demand channels. Prebid auctions, which occur outside GAM, currently do not receive UPR signals, while Google Ad Exchange and Open Bidding bidders are informed by optimized floors. Google also introduced a beta option called 'Let Google optimize floor prices' to dynamically adjust floors per bid request, which can be AB-tested and may supersede overlapping publisher UPRs. Publishers should monitor overall revenue impact and the risk of overpricing that could reduce third-party programmatic revenue or impressions.

Facing The Cruel Reality Of First-Price Auctions

The column explains the shift by Google Ad Exchange from second-price to first-price auctions in September 2019 and its consequences. It argues that first-price auctions transformed DSP behavior into bid-shading cost-savers, reducing publishers’ economic surplus. Price feedback signals, such as the minimum bid to win, enable faster price convergence and deeper bid shading. The article suggests floor prices as a tool to counter downward pressure, since they disrupt DSP win rates and push bids upward to protect value. It also notes that publishers may need to refine floor pricing and bidding strategies to contend with buy-side machine-learning systems. Written by Kean Wang of Intowow Innovation, the piece discusses how these dynamics contribute to a downward spiral for publisher costs and inventory value, and offers strategic considerations for publishers to navigate the new auction landscape.