Last-look

Last-look is an auction advantage in which one bidder learns the best competing price before it bids, so it can win by beating that price by a small margin.

The best-known case is Google's ad exchange, AdX. The UK CMA explained it in its 2020 market study. Under Dynamic Allocation, publishers using Google's ad server ran header bidding first. The ad server then sent AdX a request with the highest header bid as its floor. An AdX buyer could win by bidding just above that floor (CMA, Appendix M, paragraphs 32 and 448, 1 July 2020). AdX could also adjust its revenue share to beat the top net header bid.

The CMA noted that last look was not designed as an advantage over header bidding but followed from the order of the auctions. In 2019 Google moved to a unified first-price auction and removed AdX's ability to see header bids before running its own auction (paragraph 449). Publishers still ask whether any partner in their stack sees rival bids first, for example in server-side set-ups or when floors are passed between auctions.

Example: The top header bid is $2.00. The ad server sends AdX a request with a $2.00 floor, and an AdX buyer bids $2.01 and wins. The same buyer had valued the impression at $3.00, so in a unified first-price auction it would have had to bid closer to its value to be sure of winning.

Related terms: first-look, header bidding, first-price auction, Open Bidding, waterfall, ad exchange.

Authoritative source: UK CMA, Online platforms and digital advertising market study, Appendix M, paragraphs 448 to 450 (1 July 2020).

Read the full guide: Google ad tech remedies explained for publishers.