Auction Model Bidding

The most popular type of PPC bidding. First, an advertiser determines what maximum amount per click they are willing to spend for a keyword. If there is no competition for that keyword, the advertiser pays their bid, or less, for every click. If there is competition at auction for that keyword, then the advertiser with the highest bid will pay one penny more than their nearest competitor. For example, advertiser A is willing to bid up to $0.50; advertiser B is willing to bid up to $0.75. If advertiser A’s actual bid is $0.23, then advertiser B will only pay $0.24 per click. Also referred to as market or competition-driven bidding.