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In programmatic advertising, advertisers (or buyers) purchase inventories from publishers (or sellers) through bidding. The most commonly practiced bidding in this scenario is the second-price auction.
A second-price auction is an auction process in which the highest bid wins, but the winner pays only one cent more than the second-highest bid.
This model encourages advertisers to bid their true value, knowing that they won't have to pay the entire amount they offered.
How it works
Several advertisers place bids on an advertising slot.
The highest bid wins, but pays slightly more than the second-highest bid, rather than the entire amount they initially offered.