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Bidding to the Top: Position-based Auctions - page 3 / 23

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Generalized Second Price (GSP) Auction

Advertisers enter bids for keyword “car wash”.

Query comes, ads ranked by bid.

Price of ad = bid of next advertiser in ranking.

Advertiser pays only if user clicks on ad.

Google: [effective bid] = [bid] £ [quality]

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$0.14

DoVisitUs.com

$0.14

$0.17

CleanCars.com

$0.17

$0.24

BrightAndClean.com

$0.24

$0.32

ACarWash.com

Price

Bid

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