Ads - Auction and reserved, what does it mean?

[Lightsen]

I've wondered about this for quite a while.
Ads come in a mixture of types, and I'm not that smart when it comes to understanding what they represent.

While YouTube does tell you a little about what auction means, where they write:
"Skippable video ads that are inserted before or during the main video and are sold via the AdWords auction."

I'm still not sure what "Adwords auction" means? is this just referring to the general, 'bot puts these ads on your content because the advertisers used keywords matched up by chance' to you?
or is it something else

As for reserved, I have no idea what that means, and YouTube's explanation "sold on a reserved basis" doesn't help a dumb person like me understand.

I'm not in desperate need to know this info, I just kinda got back to this forum after a break, and thought I'd pick a topic to talk about. And since I know you guys are brill at analytics deep dives and some have even purchased adspace yourselves, you'd likely know the answer.

as a side note, I hope your all doing well, and 2019 has been good to you all as youtubers.

 

[Crown]

Hi, welcome back!

AFAIK - The "auction" ads are ones that advertisers have to say what they're willing to pay per click (or view) and their total budget and then the adwords algorithm will only display the ads for the highest bidder.

To simplify it - Imagine there was only one video on YouTube and it was monetized. If there were 3 different advertisers each wanting to place ads on that video 24/7 for the next 30 days. Advertiser A is willing to pay 10 cents per click/view, advertiser B is willing to pay 12 cents per click/view and Advertiser C is willing to pay 15 cents per clickview -> The algorithm would allocate all the ad space to Advertiser C at a rate of 13 cents (ie just enough to beat the next best price) The other advertisers would then have to increase their bids in order to get their ads on the video.

The "reserved" ads - I'm not 100% but I'm guessing they are reserved for big advertisers with big budgets who get a guaranteed fixed price if they place their ads across a large amount of vids. They don't want to be outbid. They want their ads to be seen no matter waht. Examples are ads for new movies, cars etc.

 

[Lightsen]

Hi, welcome back!

AFAIK - The "auction" ads are ones that advertisers have to say what they're willing to pay per click (or view) and their total budget and then the adwords algorithm will only display the ads for the highest bidder.

To simplify it - Imagine there was only one video on YouTube and it was monetized. If there were 3 different advertisers each wanting to place ads on that video 24/7 for the next 30 days. Advertiser A is willing to pay 10 cents per click/view, advertiser B is willing to pay 12 cents per click/view and Advertiser C is willing to pay 15 cents per clickview -> The algorithm would allocate all the ad space to Advertiser C at a rate of 13 cents (ie just enough to beat the next best price) The other advertisers would then have to increase their bids in order to get their ads on the video.

The "reserved" ads - I'm not 100% but I'm guessing they are reserved for big advertisers with big budgets who get a guaranteed fixed price if they place their ads across a large amount of vids. They don't want to be outbid. They want their ads to be seen no matter waht. Examples are ads for new movies, cars etc.

perfect explanation, thank you!

 

[KatyAdelson]

Hi, welcome back!

AFAIK - The "auction" ads are ones that advertisers have to say what they're willing to pay per click (or view) and their total budget and then the adwords algorithm will only display the ads for the highest bidder.

To simplify it - Imagine there was only one video on YouTube and it was monetized. If there were 3 different advertisers each wanting to place ads on that video 24/7 for the next 30 days. Advertiser A is willing to pay 10 cents per click/view, advertiser B is willing to pay 12 cents per click/view and Advertiser C is willing to pay 15 cents per clickview -> The algorithm would allocate all the ad space to Advertiser C at a rate of 13 cents (ie just enough to beat the next best price) The other advertisers would then have to increase their bids in order to get their ads on the video.

The "reserved" ads - I'm not 100% but I'm guessing they are reserved for big advertisers with big budgets who get a guaranteed fixed price if they place their ads across a large amount of vids. They don't want to be outbid. They want their ads to be seen no matter waht. Examples are ads for new movies, cars etc.

I had no idea that's how the bidding worked! So I guess Advertiser C would continue to get the video's ad space until they ran out of budget, or one of the others bid at least 16 cents... I learned something new today! Thanks Crown!! I guess that might mean there's a secret tiered hierarchy of videos (beyond just the "YouTube Preferred" list...) that YouTube uses to decide which high-paying bidders get popular video ad space. I wonder if someone could back-calculate the hierarchy by tracing which ads are played on different types of videos? Now I think I know why I see the same 1 or 2 ads played over and over and over again when I watch bigger YouTubers...

 

[Lightsen]

I had no idea that's how the bidding worked! So I guess Advertiser C would continue to get the video's ad space until they ran out of budget, or one of the others bid at least 16 cents... I learned something new today! Thanks Crown!! I guess that might mean there's a secret tiered hierarchy of videos (beyond just the "YouTube Preferred" list...) that YouTube uses to decide which high-paying bidders get popular video ad space. I wonder if someone could back-calculate the hierarchy by tracing which ads are played on different types of videos? Now I think I know why I see the same 1 or 2 ads played over and over and over again when I watch bigger YouTubers...

that's a really good point actually, I bet it goes from trending downwards probably...

unless trending has its own special adspace (some very high paying adspace too)

 

[Crown]

I had no idea that's how the bidding worked! So I guess Advertiser C would continue to get the video's ad space until they ran out of budget, or one of the others bid at least 16 cents...

Yep, that's exactly it. I simplified it a lot by saying there's only 1 video on YouTube. In practice, advertisers can either bid on particular videos, channels, keywords, countries etc etc.

For the bidding, it kind of works like Ebay. Buyers (advertisers) bid the maximum price they are willing to pay and the algorithm then ensures the highest bidder wins the item (or gets the ad space) but "only" has to pay the amount needed to outbid the others.