Explain how does a Google auction work
 

Each month auction gets run billion of times, and the result are such that users find ads that are relevant to what they are looking for. The search engine processes the request and runs the auction that determines the ad positions and each advertisers CPC.

The Google auctions in Adwords is a way you can bid on a certain keywords. Basically, its a bidding for keywords.

The process that happens with each Google search to decide which ads will appear for that specific search and in which order those ads will show on the page.

Each time an AdWords ad is eligible to appear for a search, it goes through the ad auction. The auction determines whether or not the ad actually shows and in which ad position it will show on the page.
Here's how the auction works:
When someone searches, the AdWords system finds all ads whose keywords match that search.
From those ads, the system ignores any that aren't eligible, like ads that target a different country or are disapproved.
Of the remaining ads, only those with a sufficiently high Ad Rank may show. Ad Rank is a combination of your bid, ad quality, and the expected impact of extensions and other ad formats.

1.When someone searches, the AdWords system finds all ads whose keywords match that search.
2.From those ads, the system ignores any that aren't eligible, like ads that target a different country or are disapproved.
3.Of the remaining ads, only those with a sufficiently high Ad Rank may show. Ad Rank is a combination of your bid, ad quality, and the expected impact of extensions and other ad formats.