A Second-Price Auction in digital advertising is a system where the highest bidder wins the placement for their online ad, but only pays the price of the second-highest bid. For example, if Advertiser ‘A’ bids $5 and Advertiser ‘B’ bids $4, ‘A’ wins but pays just $4. This method encourages honest bidding because advertisers don’t need to guess how much others will bid.
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