Banner ads are based on a CPM (cost per 1,000 impressions) model. You set the maximum price you are willing to pay and the system will charge you the minimum amount needed to show your ad. For example, if someone is bidding $1.00 for 1,000 impressions and you bid $3.00 for 1,000 impressions, you would only be charged $1.01 since that is the lowest cost to still bid higher than the next highest bidder.
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