First-price auctions: you pay what you bid

First-price auctions: you pay what you bid

Most header bidding now uses a "first-price" auction: the highest bidder wins and pays exactly what they bid. Older systems used "second-price," where the winner paid just above the runner-up.

Why it matters: under first-price, buyers bid more carefully so they don't overpay. As the site owner, you simply collect the top bid — but bidder behavior changed when the rules did.

Tiny example: bids of $3.00 and $2.40. First-price: winner pays $3.00. Old second-price: winner paid about $2.41.

One thing to try: just know your auctions are first-price now. It explains why bidders use "bid shading" tools to avoid overpaying.

In plain English: today the top bidder pays exactly what they bid, not a penny less.