Second-Price Auction

A second-price auction is a bidding model where the highest bidder wins the impression but pays the price of the second-highest bid, often plus a small increment. This design encourages truthful bidding because buyers can submit their real maximum value without fear of systematically overpaying.

In programmatic advertising, second-price mechanics historically reduced average CPM while maintaining strong win rates. As many exchanges have shifted toward first-price auctions, bid shading emerged to recreate some of the price efficiency that second-price once provided.

Understanding legacy second-price dynamics remains useful for analyzing historical performance, negotiating private marketplace terms, and comparing clearing prices across supply paths.

Similar content from our blog

SKILLS THAT MAKE A MEDIA BUYER GOOD

Affiliate marketing isn’t easy money — but it could be big money...

Read More

TWINRED 2.0: HIGH-TECH NETWORK FOR YOU

Our updated ad network and ad exchange is here: advantages of TwinRed...

Read More

SUMMARY OF TES 2025: ONE STEP CLOSER TO YOUR HEART

Back in September, we attended one of the biggest events of the...

Read More

BALANCING USER EXPERIENCE AND AD REVENUES

To be a webmaster comes with a huge responsibility. After all, there...

Read More

PRE-ROLLS IN THE LIMELIGHT: FROM SKIP TO CLICK

Pre-Rolls have become more popular than ever this year; this ad format...

Read More

HOW AI CHANGES THE ADULT INDUSTRY

Artificial Intelligence is nothing short of hype now, whether it’s finances or...

Read More

This website uses cookies to improve usability. Here you can find our Privacy Policy. By clicking on the ACCEPT button, you agree.