If you bid $5.00 for a click on your Facebook ad and the next highest bidder pays $3.00, how much will Facebook charge you?

In a bidding system like Facebook's auction for ads, the platform operates on a principle known as the second-price auction. This means that the highest bidder does not pay their full bid amount but instead pays just enough to outbid the next highest bidder. In this scenario, if you have placed a bid of $5.00 and the next highest bidder has bid $3.00, Facebook will charge you the amount of the next highest bid plus a minimal increment.

Therefore, you will be charged $3.00, as this is the amount that is sufficient to win the bid against the next highest bidder. This pricing structure encourages bidders to bid their true value without the fear of being overcharged. It maintains a fair competition while ensuring that advertisers don't pay more than they need to in order to secure a click.