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Real-Time Bidding Algorithms for Performance-Based Display Ad Allocation (2011)
| Citations: | 10 - 1 self |
BibTeX
@MISC{Chen11real-timebidding,
author = {Ye Chen and Bo Anderson and et al.},
title = {Real-Time Bidding Algorithms for Performance-Based Display Ad Allocation },
year = {2011}
}
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Abstract
We describe a real-time bidding algorithm for performance-based display ad allocation. A central issue in performance display advertising is matching campaigns to ad impressions, which can be formulated as a constrained optimization problem that maximizes revenue subject to constraints such as budget limits and inventory availability. The current practice is to solve the optimization problem offline at a tractable level of impression granularity (e.g., the placement level), and to serve ads online based on the precomputed static delivery scheme. Although this offline approach takes a global view to achieve optimality, it fails to scale to ad delivery decision making at an individual impression level. Therefore, we propose a real-time bidding algorithm that enables fine-grained impression valuation (e.g., targeting users with real-time conversion data), and adjusts value-based bid according to real-time constraint snapshot (e.g., budget consumption level). Theoretically, we show that under a linear programming (LP) primal-dual formulation, the simple real-time bidding algorithm is indeed an online solver to the original primal problem by taking the optimal solution to the dual problem as input. In other words, the online algorithm guarantees the offline optimality given the same level of knowledge an offline optimization would have. Empirically, we develop and experiment with two real-time bid adjustment approaches to adapting to the non-stationary nature of the marketplace: one adjusts bids against real-time constraint satisfaction level using control-theoretic methods, and the other adjusts bids also based on the historical bidding landscape statistically modeled. Finally, we show experimental results with real-world ad serving data.
Keyphrases
real-time bidding algorithm performance-based display ad allocation current practice optimal solution constrained optimization problem central issue original primal problem placement level static delivery scheme online solver simple real-time bidding algorithm impression granularity real-time constraint snapshot budget limit budget consumption level offline approach real-time conversion data fine-grained impression valuation performance display advertising linear programming offline optimality real-time constraint satisfaction level dual problem revenue subject real-time bid adjustment approach individual impression level primal-dual formulation ad impression value-based bid offline optimization online algorithm experimental result ad delivery decision making non-stationary nature adjusts bid real-world ad control-theoretic method optimization problem offline global view inventory availability historical bidding landscape tractable level
