Jim has created a Google Search ad with a bid of $5. Two other advertisers in an auction have bids of $2.50…

Jim has created a Google Search ad with a bid of $5. Two other advertisers in an auction have bids of $2.50 and $2. How much would Jim pay for the first spot in the auction?

  • $5
  • $2.51
  • $4.50
  • $2.50
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Correct Answer is: $2.51

Jim would pay only $2.51 for the first spot in the auction. In a standard second-price auction based only on bids, the advertiser doesn’t have to pay their full bid. They only have to pay $0.01 more than the amount of the next highest bidder.

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