What do you think about platforms moving to first price auctions? Do you think we'll start to see more of that?
1) GSP doesn't promise any specific price. FPA promises "the price you bid." If that's not what people are paying by simple math, it will be confusing. That hurts trust. This could happen if you have a user quality control system that penalizes poor quality. GSP gives you a second control (price) in combination with delivery volume and placement to manage user experience.
2) People expect GSP. Claiming FPA is an admission that you need to build an autobidder system versus letting people discover this for themselves.
Like, the trouble with FPA is that it extracts "too much" money from the bidder, as they pay their marginal cost. GSP (second price more generally) does have the nice property that you'll always pay less than your maximum bid, which is the margin (assuming you're bidding your maximum profitable LTV).
Also, congratulations Andrew, I'm sure you guys are gonna do incredibly well (and if you have problems in this space, I strongly recommend giving promoted.ai a look).
In a GSP, I bid $1. I'll pay the second price (not really but for purposes of clarity assume it) which was $0.90.
In this case, I always (almost) pay less than my maximum bid, which allows for margin given to me (assuming true value and a bunch of other unrealistic things) rather than in the FPA, where I pay $1, assuming my bid is highest.
I'm not talking in incentive-compatibility terms, rather in terms of where the "margin" goes.
https://medium.com/promoted/when-goog-fb-is-bad-for-your-per...