Some publishers have enjoyed a bit of a programmatic-ad-revenue windfall in the immediate aftermath of Google’s full rollout of a first-price auction.

After months of testing first-price auctions on 10% of inventory that runs through Google Ad Manager, the tech giant said it would roll out completely to first-price by the second week of September, to keep in step with the rest of the ad tech market.

Since then, some publishers have seen CPM spikes between 9% and 50% on display inventory as a direct result, in the first few days post-full rollout, according to publisher sources. Other patterns, such as volume of impressions traded via header bidding, are less consistent across each publisher. Several have seen a bump in impressions traded of more than 10% since the days before the rollout, while others have seen the volume of impressions drop despite CPMs rising.

For some, the fact CPMs have spiked isn’t a particular surprise. First-price auctions require ad buyers to pay what they bid, meaning that they may raise their bids in order to guarantee they win a desired impression. That’s a far cry from the tactics used when second-price auctions ruled ad buying and selling on the open exchange. In a second-price scenario, ad buyers could bid sky-high amounts to secure a win, with the security of knowing they would only have to pay a penny or cent over the second-highest bid.

Any kind of large transition like this was always going to cause price fluctuations, and those publishers that have seen spikes don’t expect them to last long-term. Some of those that saw an initial spike have already seen CPMs start to normalize once more. That’s partly because they don’t believe buyers have been caught out by the transition, and also the use of bid shading would have helped to readjust any spikes. “Ad buyers have had many months to get used to using techniques such as bid shading to circumnavigate the initial price rise in inventory that the change to first-price causes,” said a programmatic director at a publisher. “I can’t imagine many buyers were caught unprepared, given the publicity around this implementation.”

Bid shading was a technique that demand-side platforms quickly jumped on as an opportunity to help ad buyers transition from second- to first-price auctions. A DSP algorithm determines a kind of midway sweet spot between first- and second-price for a buyer. However, bid shading as a method has been described as a quick-fix solution, and one that has come under greater scrutiny by advertisers for how they’re charged for it. But for now, at least, bid shading is effectively the counter to publishers’ floor prices.

Publishers also don’t expect spikes to remain so high once ad buyers have adjusted their bidding strategies to cater more for first-price environments. “The initial spike in CPMs people are seeing won’t last but I do expect that we’ll see a marginal increase in CPMs over time as the market settles down,” said an executive at a magazine publisher.

Other publishers are still scrambling to adjust to the transition, and haven’t seen obvious CPM spikes yet but are monitoring any fluctuations. Google hasn’t rolled out 100% yet across the board, according to some publishing executives.

The change puts Google on even keel with the rest of the ad tech market, given most ad exchanges have offered first-price for just over a year. Publishers, as well as buyers, have welcomed the move as a means of ensuring that there is a standardized auction once again rather than buyers having to straddle two auctions. Under second-price, Google had historically enjoyed a “last-look” advantage on bid allocations — a tactic that prompted the creation of header bidding among independent exchanges.

“A level playing field in terms of auction mechanics can only help competition and fairness of transactions,” said an executive at a digital publisher.

The completion of a full first-price rollout means that publishers must now use Google’s “unified pricing,” which was first announced in April and met with outrage from some publishers. The core gripe was that publishers felt Google had restricted the amount of rules on price floors they could set to 100 — far below the standard amount used by a publisher with large programmatic ad revenues.

At the time, some of the larger publishers described the move as a “shakedown.” Google has since then rowed back on those restrictions, and doubled the number of rules, to better satisfy publishers. However, some of the bigger publishers remain displeased at having any restrictions on how many rules they can set for their floor prices.

Google will keep second-price open for 3% of its inventory, which the search giant has claimed is for the strict purpose of monitoring any differences in the two auction types. While it does so, there will always be question marks hovering over its motivations for doing so, according to some publisher sources.

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