AdWords Auctions

In class on Friday, we were talking about examples of different types of auctions. I was interested to see how the auctions worked for Google Ads. I found this website that have a quick video explaining how they determine which add wins the auction: Ad Auction

This process is much more complicated then I expected. The winner pays the amount that the person below them bid so they often get the Ad for less than their maximum bid. Also, the price they have to pay also depends on the quality of their ad. If they have a higher quality ad, they don't need to pay as much.