Unraveling The Mystery Of PubMatic’s $5 Million Loss From A “First-Price Auction Switch”
PubMatic revised its 2024 revenue projections, citing a $5 million shortfall due to Google DV360 shifting to first-price auctions in May. PubMatic had been tagging bid requests as second-price auctions, winning more bids from DV360 as a result. However, DV360’s updated bidding logic affected all SSPs, redistributing PubMatic’s lost revenue to competitors. Despite the industry-wide shift to first-price auctions in 2017, PubMatic continued using second-price auctions, perplexing experts. The revenue didn’t leave the market but was reallocated to other exchanges when DV360 stopped honoring second-price bid requests. PubMatic declined to comment on the discrepancy.
Your Day One Recap: DOJ vs. Google Goes Deep Into The Ad Tech Weeds
The first day of Google’s ad tech antitrust trial in Virginia highlighted the complexities of the ad tech ecosystem. The DOJ argues that Google operates three monopolies in ad servers, ad exchanges, and ad networks, citing Google’s control of 87-91% of the ad server market and its tie between Google Ads demand and AdX. Google’s defense counters that the DOJ’s claims are outdated, asserting that ads span multiple channels, and it only controls 25% of the market. Witnesses from companies like Gannett and Index Exchange testified on Google’s dominance, with debates over header bidding, programmatic advertising, and server switching challenges.