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points by mlmonkey 13 hours ago | 0 comments

There's a reason why GSP (Generalized Second Price) auctions are called "truthful auctions", and that's because they elicit the true value as the bid from the advertiser (in theory).

So (in theory) advertisers will lower their bids if they're not getting the desired value from the clicks; and over time some will migrate budgets to other channels (like "influencers"? shudder ...).

[–] kevinwang 13 hours ago

(Doesn’t change the point of your comment, but doesn’t Google use first-price auctions now?)

[–] mlmonkey 13 hours ago

I don't think so. First price auctions are not truthful, and advertisers hate them. But there are 50 shades of gray between a second price auction and a first price auction.... if you get my drift.