If you win a second-price auction in Display & Video 360 with a bid of $12, and the second-highest bid is $8, you will pay $8.01 for these impressions.

• $12.00
• $8.00
• $12.01
• $8.01

The correct answer is: $8.01

Explanation: In a second-price auction model, the winner pays just one cent more than the second-highest bid. Therefore, despite your winning bid of $12, the amount you actually pay is based on the second-highest bid of $8, plus one cent, making it $8.01. This pricing mechanism ensures you only pay slightly more than what the next willing bidder would have paid, encouraging participants to bid their true value for the impression.

Chapter 21: Understand Auction Dynamics