The principle of operation of the VCG auction is that:

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rifat28dddd
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Joined: Fri Dec 27, 2024 4:05 pm

The principle of operation of the VCG auction is that:

Post by rifat28dddd »

the system assigns a basic volume of traffic (65%) to all ads in the block. The advertiser pays for it at the price of the previous positions;
Additional traffic costs more. If an advertiser wants their ad to be higher than their competitors, they must pay an amount above their bid. How much additional traffic costs depends on the bid of the competitor whose ad is being broadcast below.
Based on the VCG auction principle, the system distributes impressions in the premium block, as well as the block under the search results, in the suggestion, product gallery and extended format.

For example, let's take a search for the query "carpet dry cleaning in Moscow":

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Let's show how places can be distributed between advertisers based on their bid. Let's say there are six advertisers with bids of: 3, 5, 6, 7, 10, 12 rubles.

The advertising block will contain four ads with the highest bids: 12, 10, 7, 6 rubles (at the same time, advertisers with lower bids - 5 and 3 rubles - will drop out of the search):

for basic traffic (65%) all 4 advertisers will pay 5 rubles per click. This will be the rate of the closest competitor who has left the system;
the advertiser who is on the fourth line in the advertising block will receive basic traffic (65%) and will also pay for each click at the basic rate (5 rubles);
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