Jim has created a Google Search ad with a bid of $5. Two other advertisers in an auction have bids of $2.50 and $2. How much would Jim pay for the first spot in the auction?

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Lata Bala

Google Ads auction

Jim has created a Google Search ad with a bid of $5. Two other advertisers in an auction have bids of $2.50 and $2. How much would Jim pay for the first spot in the auction?

  • 2.51
  • 5
  • 4.5
  • 2.5

The correct answer is: $2.51 ✅

Google Ads Search Certification

Why Correct?

Google Ads uses a system called Second-Price Auction for Search ads. That means:

Even if Jim bids $5, he doesn’t pay the full amount unless it’s necessary to beat the next highest competitor.

Instead, he only needs to pay just enough to beat the second-highest bid — plus $0.01.

Real-life Example:

  • Jim’s bid: $5
  • Second-highest bid: $2.50
  • What Jim pays: $2.50 + $0.01 = ✅ $2.51

So, Jim wins the top position in the auction, but he only pays $2.51, not the full $5. This helps advertisers save money while still getting premium ad placements.

Quick Comparison of Options:

OptionExplanation
✅ $2.51Correct – Google Ads charges just enough to beat the second-highest bid by $0.01
❌ $5Wrong – That’s Jim’s maximum bid, not what he pays
❌ $4.5Wrong – This number has no basis in the bidding structure
❌ $2.5Wrong – That’s the second-highest bid, but Jim must beat it by at least $0.01

Summary:

Even if you bid high, Google Ads ensures you only pay what’s needed to win, which makes the system more cost-effective for advertisers like Jim.

Now, if you are ready, then you take the Google Skillshop test for the Google Ads Search Exam. You can also see more Google Ads Search Certification Exam questions.