Brist uses a second-price auction model in order to run a real-time auction when promoted listings are requested via the Ads API. Under this system, the winner of the promoted ad slots pay the minimum amount needed to win the auction, rather than the amount they bid per click. For example, if we have 3 advertisers, advertiser A, B, and C, who bid the following amounts per click:
- A: $1
- B: $3
- C: $10
And, we had only one promoted slot available, advertiser C would win the auction, however, they would only have to pay $3.01, since that was the minimum amount needed to win the auction over advertiser B. Of course, the auction system does not only take into account the amount the advertisers are bidding, but also the likelihood that customers will actually click on the promoted listing if it's shown to them. To enforce this, we multiply the bid of the advertiser with a relevancy metric that is informed both by an optional relevance score you provide to us when running the auction along with our prediction of how likely it is that a viewer of the promoted ad is to click on it.
This process happens in real-time when you make an API request, and the specifics of this infrastructure is fully abstracted away from you as the user of the API.
Updated over 1 year ago