CTV programmatic auctions are first-price: the winning bidder pays exactly what they bid, not one cent above the second-highest bid. This is different from the second-price (Vickrey) model that dominated desktop programmatic until 2019, when Google and most major exchanges shifted to first-price.
CTV adopted first-price from the start for two reasons: the CTV programmatic market developed after the industry-wide shift away from second-price auctions, and the absence of cookies made the transparency advantages of second-price less relevant to the buyer experience.
What this means for India CTV buyers: In first-price auctions, you pay exactly what you bid. Overbidding is expensive — there is no mechanism that automatically reduces your cost to the clearing price. Sophisticated buyers use bid shading: algorithms that estimate what the impression will clear at and bid below the maximum willingness to pay. DV360 and The Trade Desk both have bid shading built into their automated bidding products.
In India, where CTV open auction CPMs typically clear at Rs 150–350 and PMP deals run Rs 300–900, the gap between a naively set maximum bid and the actual clearing price is often Rs 50–150 CPM. At 1 crore impressions that is Rs 50–150 lakh in avoidable overspend.
Practical guidance: do not set your maximum CPM as a fixed manual bid. Use DSP automated bidding with a target CPM goal, let the algorithm learn clearing prices over the first 1–2 weeks of the campaign, then review average clearing CPMs vs target monthly and adjust.
Related questions
For a full breakdown of auction mechanics, see the RTB in CTV knowledge base article.