Yandex Direct: What Is VCG?

The VCG auction model (also known as the Vickrey-Clarke-Groves auction model) is the model that Yandex uses to decide what the cost-per-click should be for ads in the premium positions. Under the VCG model, cost-per-click is increased based not only on an increase in position, but also on the additional traffic received. This is seen as fairer than the alternative GSP auction model, which does not take levels of traffic into account.