Ad Auction

An ad auction is the real-time process a platform runs to decide which ads to show, in what order, at what price, every time there's ad space to fill.

It isn't a simple highest-bidder-wins auction. Google Ads and Meta both use variants of a second-price-style auction weighted by predicted quality — your bid matters, but so does predicted CTR, ad relevance, and landing page experience (rolled into Quality Score on Google, or the equivalent relevance/quality signals on Meta). A lower bidder with a much better predicted experience can beat a higher bidder.

This is why two advertisers bidding the same amount can pay very different actual prices, and why improving creative and landing page quality is often cheaper than just raising bids to win more auctions.