Cost per Play =(Floor Rate + CAASie Margin) x (1.05^Net Eligible Bidders) + GST + Transaction Fee
(a) The (floor rate + CAASie margin) is $1.00
(b) There are only two bidders for the relevant Play:
(i) ‘ABC Pty Ltd’ has campaign set to auto-bid, and an hourly budget of $10
(ii) ‘ZXY Pty Ltd’ has campaign set to auto-bid and has an hourly budget of $5
(c) ‘ABC Pty Ltd’ will win the Play for $1.183 = ( $1.00x1.05^1 + $0.108 GST + $0.026 Transaction fee), until their hourly budget cannot sustain that rate of spend
(d) ‘ZXY Pty Ltd’ will win for $1.183, until ABC Pty Ltd can start to spend again or ZXY Pty Ltd runs out of budget.
(e) When ZXY Pty Ltd exhausts their budget, they are no longer eligible bidders. ABC Pty Ltd is now the only bidder and will win at lowest available price $1.127 = ( $1.00x1.05^0+ $0.102 GST + $0.025 Transaction fee)
(a) Add ‘DEF Pty Ltd’ to the above, but they have set a manual bid of $0.70.
(b) The manual bid is below (floor rate + CAASie fees) x (1.05^0) + GST + Transaction Fee, so they’re not an Eligible Bidder.
(c) Scenario 1 outcome remains as above.
(a) The (Floor rate + CAASiemargin) is $2
(b) There are only three bidders for the relevant Play:
(iii) ‘Company 1’ is auto-bidding with hourly budgetof $10
(iv) ‘Company 2’ is auto-bidding with hourly budgetof $10
(v) ‘Company 3’ is manually capping their bid at$2.29 with an hourly budget of $10
(c) ‘Company 3’ is eligible for auction, however due to the additional bidders, their bid is capped below the Cost Per Play. ‘Company 1’ & ‘Company 2’ have the same budget and at first auction, will win at random for $2.365 = ( $2.00x1.05^2 + $0.215GST + $0.052 Transaction fee). It is only randomised when the remaining budget between bidders is exactly the same.
(d) The winner of following auctions will oscillate between Company 1 & 2 according to how much budget they’ve already consumed (for every ad that plays, their auto-bid cap drops bythe cost of the ad).
(e) ‘Company 1’ exhausts their available budget, leaving only 2 eligible bidders. The cost of an ad is now $2.254 = ( $2.00x1.05^0 + $0.205 GST + $0.0496 Transaction fee).
(f) ‘Company 3’ is no longer capping itself out ofthe win, however ‘Company 2’ will continue to win if they still have the highest available spend rate.
