How it works
- Every time for a search result, it will do an auction to price different ad locations. The advertiser would need to pay only if the user clicks the ad.
- When the user clicks, the advertiser only needs to pay second-highest price.
- This can guarantee that they bid their true value.
- Click through rate
- Landing page
- bid price * quality = ad rank
Cost Per Click (CPC)
- price to pay by each client in the rank list
- p1 = p2*q2/q1
- the last one in the rank list pay the minimum price