Fostering trust and transparency: Moving to a First Price auction dynamic

Rolling out this week, eBay will be migrating all programmatic auction mechanics to First Price across all requisite ad placements. eBay has been building its own internal ad stack, a server-to-server solution we’ve dubbed “Sandwich.” The Sandwich platform is designed, among other things, to ingest bids from competing programmatic demand sources and return a clearing price to the winner. Moving to First Price is a natural extension of eBay’s programmatic ad stack, and is in keeping with the recent release of ads.txt to reduce ad fraud and increase transparency.

Under this First Price paradigm, the revenue payment due from the auction winner is based on that clearing price. eBay is announcing formally that Sandwich is adopting a First Price auction model, meaning the amount due to eBay from the winning bidder for a particular impression is equivalent to its submitted bid.

Moving to a First Price auction dynamic will help remove marketplace opacity. eBay seeks to partner more closely with the buy side to ensure a transparent, fraud free partnership for the long term.