Second-Price Auction

A type of auction model in programmatic advertising, second-price auctions are where the highest bidder wins but only pays the price equal to the second-highest bid plus one cent. So if Buyer A bids 2.50 Euros and Buyer B bids 3 Euros, Buyer B would win but would only pay 2.51 Euros.

Second-price auctions benefit advertisers as they can bid the maximum they would be prepared to pay while still ensuring they don’t pay more than the actual market value.

A second-price private auction (also known as invitation-only or closed auction) is only open to select advertisers as decided by the publisher.

See also First-Price Auction.