Beyond Waterfall: Understanding Google Ads’ Shift to Real-Time Bidding and Its Impacts for Publishers

Think about it: The digital marketplace has billions of transactions every millisecond. Publishers serve as the backbone, offering valuable digital real estate where advertisers can showcase their messages. This marketplace, however, is not static.

A significant transformation is underway, redefining how advertising spaces are bought and sold: Google’s shift from the traditional waterfall method to the dynamic realm of AdMob bidding.

Let’s dissect this new system further.

Google’s Move from Waterfall to AdMob Bidding

Google has transitioned from the waterfall method, a sequential bidding process, to a more dynamic and efficient unified auction system called AdMob bidding. 

In the traditional waterfall method, advertisers receive ad inventory in a hierarchical sequence based on historical CPMs (Cost Per Mille). Often, this results in suboptimal revenue for publishers and lacks real-time competition.

AdMob bidding, on the other hand, introduces a real-time bidding environment where all advertisers compete for ad inventory simultaneously.

Studies and data reveal the potential impact of this shift. Publishers who transitioned to unified auction systems like AdMob bidding experienced a notable increase in their ad revenue. Some report up to a 20% uplift in CPMs. This is attributed to real-time competition among advertisers, ensuring that the highest bidder wins the ad spot, thus maximizing the ad inventory’s value.

Google’s own research suggests that publishers adopting unified auctions see an improvement in fill rates due to the broader pool of competing advertisers, further enhancing revenue potential.

Challenges for Publishers

While the transition to AdMob bidding offers numerous benefits, it presents several challenges for publishers:

  • Technological Integration: Upgrading platforms for compatibility with real-time bidding demands significant technical resources and expertise. This transition is not just procedural but requires a substantial investment, posing a challenge especially for smaller publishers with limited resources.
  • Strategic Shift: Publishers must adapt their strategies to a more dynamic advertising ecosystem. This includes monitoring pricing strategies and managing ad inventory more vigilantly.
  • Control Over eCPM: The shift to AdMob bidding brings an algorithmic control over eCPM, leading to its gradual reduction. Unlike the waterfall method, which allowed for the customization of multiple high-eCPM layers, the unified auction system compresses the eCPM range, often resulting in an overall decrease.
  • Revenue Volatility: This compression of eCPM values and the reliance on a singular revenue source introduce unpredictability in revenue streams. Publishers may face initial disruptions and require time to adjust and stabilize their revenue under this new system.

Strategic Recommendations for Publishers

Given this, what can advertisers do to reap the benefits of this transition?

Adopt and Adapt
Publishers must embrace the change and adapt their strategies to thrive in the new AdMob bidding environment. This includes investing in technology and skills development to effectively manage real-time bidding. Staying informed about the latest trends and best practices in the unified auction landscape will also be crucial for success.

Use Data Analytics
Leveraging data analytics is more critical than ever. Publishers should use advanced analytics tools to gain insights into inventory performance and bidding patterns. This data-driven approach will enable publishers to optimize their ad placements and increase ad revenue.

Diversify Demand Sources
In the unified auction environment ushered in by Google’s AdMob bidding, relying on a single demand source or ad network presents heightened risks for publishers. This new landscape demands a more nuanced approach to monetization, where diversification of demand sources becomes necessary for stability.

Engaging with various ad exchanges and demand-side platforms (DSPs) ensures a steady flow of competitive bids, enhancing revenue potential and mitigating the risk associated with dependency on any single source.

Publishers leveraging multiple demand partners may witness a significant uplift in their overall CPMs as competition for their ad inventory intensifies, driving up the value of each impression.

In this context, publishers should consider expanding their network of demand partners to include emerging and established players. Integrating AlgoriX as an additional demand source can be particularly beneficial for publishers looking to compensate for any potential losses from the transition to Google’s unified auction system.

Embrace the Unified Auction Environment

Google’s shift from waterfall to AdMob bidding represents a significant evolution. Despite the challenges, it allows publishers to maximize ad revenue through a more competitive and transparent bidding process. 

By adopting and adapting, publishers can navigate the transition effectively and position themselves for success in the new advertising landscape.



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Pranav Kataria

Associate Director, Programmatic Strategy

As the Associate Director of Programmatic Strategy, Pranav brings over 8 years of experience in the adtech industry working with Publishers, DSPs, Agencies, and Advertisers from global regions to improve their monetization, performance, and strategies. With great understanding of the mobile market, his expertise lies in analytics, account management, strategy, and ad sales. With this refined skill set, he brings customer-centric mindfulness that enables growth and innovation.

Before joining AlgoriX, his keen business perspective and skills have earned him opportunities to work across different organizations and verticals in the advertising ecosystem; be it improving the processes, sales enablement, and managing client relationships.

Ray Xia

VP, AlgoriX Partner Studio

Ray Xia was a mainstay at Tencent Games, having worked at the company for 13 years. There, he took on various roles including backend developer, application development manager, and game producer. During this time, he actively participated in the development and operation of popular titles such as QQ Pet, QQ Pet Fight, and games involving the Naruto franchise. To date, these games have over 10 million daily active users. Through this rich well of experience he has accumulated covering all aspects of game development and operation, he aims to spearhead more creative endeavors via AlgoriX Studios.

Naomi Li

VP, Research and Development

Naomi Li has a decade’s worth of experience in research and development for the adtech industry. She started her career at Baidu where she was mainly responsible for the Automation Testing of the Baidu Fengchao Ad Search Engine. There, she focused on the fields of overlapping experiment infrastructure, rich media ads rendering, and ad antispam technology. Moreover, as part of Baidu’s International Group, she led the research and development of various monetization and advertising mechanisms for Baidu’s overseas app store, SDK, and AdNetwork. At present, she is responsible for the overall direction of AlgoriX’s R&D efforts, which include product planning, technical architecture design, and talent training.

Frederic Liow

SVP, Revenue Growth & Strategy

A veteran in the digital advertising industry, he began his career during the early days of the dotcom era. To date, his passion for the digital industry is still as strong as ever (and getting even stronger). Spanning twenty years of his digital career, he has worked for leading companies like Nielsen, MRM McCann, Omnicom Media Group, Millward Brown and Smaato. Currently, Frederic is the revenue officer for AlgoriX spearheading global revenue growth, business expansion and strategic partnerships. He has set up and built AlgoriX’s global mobile ad exchange, hiring talents, establishing best practices, and injecting global industry standards into the company. Prior to his current role, he was the Head of Demand for Smaato, overseeing the demand business and operations in APAC. Frederic is currently based in our Singapore HQ.

Xinxiao Guo

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Equipped with a decade’s worth of experience in global product operation as well as a deep understanding of emerging markets, Xinxiao brings her expertise in mobile traffic monetization and programmatic advertising to the table. Before her role at AlgoriX, she was a core member of iQIYI’s research and development unit. After that, she moved to Baidu as Head of Programmatic Advertising.

At present, she is AlgoriX’s co-founder and Chief Operation Officer. Together with the team, she aims to help game developers effectively reach global audiences and implement better monetization strategies.

Ruiz Xie

Chief Executive Officer

With nearly 20 years of business experience, Ruiz Xie founded AlgoriX with the vision of creating a global advertising platform and entertainment ecosystem. Through AlgoriX’s services, he aims to create a more inclusive tech ecosystem by providing customized solutions that meet the needs of businesses at every stage. At the same time, through AlgoriX Studios and its third-party partner studios, the company is currently bringing to life a greater goal of providing a comprehensive entertainment platform for people worldwide, which covers games, IP, comics, movies, and more. At present, he leads nearly a hundred employees with concrete plans to expand the company by establishing more offices worldwide.

Before founding AlgoriX, Ruiz Xie joined CoreMail in 2002. There, he created the first Ajax version of the mailbox in China for NetEase, which was the largest Internet company in China at the time. After that, he joined Tencent in 2005 and contributed to the creation of Tencent Games while also building a large scale distributed storage system. In 2013, he moved to Baidu where he took part in developing Baidu International’s overall architecture and search advertising system. During his tenure, he was also the Chairman of the Baidu Global Technical Committee and Baidu’s chief architect.