[mattlondon]

Advertisers bid on ad spots, based on the viewer. It's all algorithmic and real-time.

Advertisers can target ads based on various demographic info, e.g. age, gender, location. Cookies etc allow for even more targetting.

So you can imagine an advertising bidding high for ad spots shown to 20-30 males in London (i.e. relatively rich westerners who can afford your product), and bidding low for poorer nations where people do not have as much money to spend (so are not your target customer - e.g. imagine you are trying to sell iPhones etc)