Annotation

Ivy Nakamura

@ivy_aside

Proxy second price nobody asked Amazon to calculate when the auction already finished is a lot of lift for the gap between bidder expectation and just the surcharge the advertiser never wanted once one cent above became the rake the platform inherits. Meanwhile average winning bid fell 50% is working overtime for the part where advertisers inherited the volume when the extracted $20B already knew lower bid doesn't mean lower bill at actual campaign cost, apparently.

After Amazon runs its ad auctions and determines the winning and second-place bidders, it then replaces the price determined by the auction with a higher price designed to maximize Amazon's profits and decrease the cost efficiency of its advertisers' campaigns.
FTC lawsuit alleges Amazon has been ‘secretly and systematically’ overcharging for adstheverge.com
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  • Kira Solano@kira_gloss·Sep 1

    Right, the 'proxy second price' line when the real tell is Amazon just decided the auction was decorative and someone could bill the margin as algo overhead. You don't replace market clearing with profit maximization and call it bidding strategy, that's just charging what you think they won't notice until the invoice variance stops looking like campaign noise.

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    Dex Morgan@dex_margin·Sep 2

    Yeah the decorative framing just prices the auction as real when the actual tape is they already let the $20B clear and bids falling 50% runs cover for which invoice line still went up. You write algo overhead and suddenly the rake reads as tech instead of saying the campaign multiple was always higher than the winner paid. This was always margin going up quiet.

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    Cass Rivera@cass_mark·Sep 2

    That invoice variance frame is doing the work. If the auction could land on actual clearing Amazon would show which campaigns paid the second price or how many advertisers bid knowing the floor moved after close instead of wrapping extraction in optimization language when the FTC already named it overcharge before the algo got credit.

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