Google is Postponing the Deadline for Bids, Prolonging the End of the World

Google's most recent action in relation to app bids with real-time bidding

Google Ads had already declared its desire to transition to real-time bidding auctions for apps back in May. This would result in significant change for publishers, and many were worried about ad revenue. The deadline for this adjustment has now been extended, though.

Boo Jankovi, head of ad monetization at GameBiz Consulting, offers his perspective on the most recent update in this guest article, highlighting what will happen next and what the implications of the initial announcement are for game producers.

In contrast to earlier posts, this one is unique. It will be about news originating from Google, like the majority of them. It will be brief and delicious, in contrast to the majority of them, which will be fantastic news for those who create mobile games and apps.

What exactly occurred During 1st week of September, 2023

Google just announced that it is essentially postponing its deadline for publishers to move from waterfall instances (line items or set price points) to bidding. The announcement was made in a blog post written by Carlos Façanha, Director of Product Management, App Ads.

Google will eventually stop responding to waterfall calls that don't contain the bidding ad unit up until the initial deadline (October 31, 2023). Google Ads will start to cut back on spending on multiple requests in waterfalls without a bidding ad unit over the coming weeks. Google Ads will discontinue purchasing multiple requests in waterfalls devoid of a bidding ad unit as of October last week.

Google will continue to respond to non-bidding waterfall calls after the deadline, but only if there is only one call within the waterfall: Google Ads may continue to make purchases on mediation waterfalls that only make one call to Google Ads demand.

As long as the waterfalls contain the bidding ad unit from Google (hybrid-waterfalls), Google will continue to respond to non-bidding waterfall calls after the last week of October 2023, including waterfalls with numerous non-bidding calls. According to the release, Google Ads will continue to respond to numerous calls within hybrid waterfalls on partner platforms that are supported. Publishers will be most interested in this section of the announcement because it is the most important. Their explanation that they still intend to stop answering any non-bidding calls by early year 2024 spoils the joy: After October last week, Google Ads will gradually stop responding to waterfall queries in hybrid, and we anticipate having finished this transition by the beginning of 2024.

Let's delve a little more into this and the prior news and what it implies for publishers now that the essentials have been covered.

Google declared in May that it would discontinue meeting its demand through non-bidding calls as of October 31, 2023. For publishers, this meant that the network—which had previously refused to open its demand via bidding (outside of its own mediation—AdMob)—was suddenly changing tactics and requesting that all publishers using the AdMob network—which essentially means all publishers who use ads to monetize their games and apps—use AdMob via bidding as opposed to waterfall instances (as still price points).

The argument was that by doing this, the entire ecosystem would profit from more efficient media buying on applications.

Effects of the initial disclosure

The results were felt right away. AdMob is typically the largest or one of the largest sources of ad revenue in applications and games, thus any changes there can obviously have a significant effect on the publisher's overall ad revenue. Only a few effects of Google's switching to bidding were felt by publishers:

It took development work to update the mediation SDK and network adapter in order to execute Google bidding. A two-week AB test with a test group operating in a hybrid configuration was required: AdMob examples from the past combined with Google bidding (per Google's instructions)

The partners of GAM (Google AdManager) were doomed. After the deadline, they wouldn't be able to resell it via repeated calls because the majority of the traffic that GAM partners give is truly Google demand. But more on that in a moment.

The most significant of the remaining consequences was the influence on eCPM and overall ad monetization performance. For our clients, we at GameBiz conducted numerous AB tests. The effects of changing from a multi-call arrangement to a hybrid setup were frequently favorable. However, there were numerous instances where adding a bidding ad unit from Google had a detrimental impact on performance, sometimes by as much as 10%. The outcomes varied based on the game, platform, ad type, and country; despite Google's best efforts, there was no universally applicable answer.

This posed an even greater threat. According to Google's instructions, the experiments were not revealing what would occur after October 31. After October 31st, there would only be a bidding setup, which we never tested; we were just comparing multi-call configuration vs. hybrid arrangement. How the performance will look once we remove calls with fixed price points from the waterfalls was the main issue (and still is, it has just been postponed). In some testing, we simply disabled AdMob instances and continued to bid only (simulating what would occur after the deadline), and the outcomes were as we had anticipated: unfavorable. If you're asking how bad they were, they were generally more negative in areas where AdMob instances were taking a larger share of the income, though it varied by game, platform, format, and country. The fact that we wouldn't be able to access Google Demand through GAM Partners wasn't even considered at this point (read on for more information).

GAM Partner Line Items: 

Mobile publishers have been utilizing the tactic of including GAM partner line items into their waterfalls for some time now to increase the competitiveness of their cascade. More importantly, the majority of the demand was actually coming from Google. The demand from GAM partners was made up of their own demand (direct or resale). Publishers might increase their eCPM and overall ad ARPDAU in this way by gaining more access to Google demand. The fact that Google now only accepts bids meant that this strategy was no longer effective. It meant a further drop in eCPM for publishers and a lack of confidence on the side of GAM partners, who would have to either stop heavily relying on Google and diversify their demand, or maybe altogether change their business model.

The Schedule Timings:

Do not disregard the time of the announcement of the deadline extension. The fourth quarter is coming up, which is when the advertising business is most vulnerable. Anyone who uses adverts to monetize their games is aware that this is the year's most lucrative period. For special occasions like Christmas, Black Friday, and Thanksgiving, advertisers are allocating larger resources. And indeed, Google is the firm that brands most likely purchase games and apps for mobile devices. Thus, as they noted in their blog, Google's decision here not only provides developers more time to adjust to the shift but also prevents serious problems or market share loss during a crucial time of the year for Google.

To Sum Up:

For once, Google has good news. Publishers of mobile games and apps are still permitted to employ several calls in their waterfalls as long as a bidding ad unit is utilized. All of Q4 2023 will be true of this. As they note, the transition will be finished in the first quarter of 2024, at which point Google will only react to bid requests.

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