First be sure to set size of your ad creative to the same as your image.

1. In the content editor, click on the 'insert image' button which is the top left most button. Fill in your image URL and click 'insert'. Your image should appear in the editor.
2. Click on your image to select it. Now click on the 'insert link' button which is next to the 'insert image' button. Fill in the link URL and click 'insert'. Your image should now be linked to your site.
3. Click on the 'Save & Preview' button, and check that your ad works like it should. Finished!

For each auction, if there are multiple bids from one ad group, only the highest is used.

However, it is still possible for an advertiser to have multiple bids on an ad zone if he has more than 1 ad group bidding on it.

This gives advertisers more flexibilty in their targeting.

For example: there are 2 ad zones, 'sgForums' - which covers all ad spots on sgforums.com, and 'sgForums Front Page' which only has ad spots on the front page. Advertisers can then choose to target the whole site, or only the front page.

See How Bids are Processed.