Bid Optimization in Broad-Match Ad auctions

Details Bid Optimization in Broad-Match Ad auctions Bid Optimization in Broad-Match Ad auctions

2009-01-23

arxiv.org/abs/0901.3754v1

Computer Science

Computer Science and Game Theory

World Wide Web Conference (WWW09), 10 pages, 2 figures

Scientific paper

Ad auctions in sponsored search support ``broad match'' that allows an advertiser to target a large number of queries while bidding only on a limited number. While giving more expressiveness to advertisers, this feature makes it challenging to optimize bids to maximize their returns: choosing to bid on a query as a broad match because it provides high profit results in one bidding for related queries which may yield low or even negative profits. We abstract and study the complexity of the {\em bid optimization problem} which is to determine an advertiser's bids on a subset of keywords (possibly using broad match) so that her profit is maximized. In the query language model when the advertiser is allowed to bid on all queries as broad match, we present an linear programming (LP)-based polynomial-time algorithm that gets the optimal profit. In the model in which an advertiser can only bid on keywords, ie., a subset of keywords as an exact or broad match, we show that this problem is not approximable within any reasonable approximation factor unless P=NP. To deal with this hardness result, we present a constant-factor approximation when the optimal profit significantly exceeds the cost. This algorithm is based on rounding a natural LP formulation of the problem. Finally, we study a budgeted variant of the problem, and show that in the query language model, one can find two budget constrained ad campaigns in polynomial time that implement the optimal bidding strategy. Our results are the first to address bid optimization under the broad match feature which is common in ad auctions.

Affiliated with

Also associated with

No associations

Rating

Bid Optimization in Broad-Match Ad auctions does not yet have a rating. At this time, there are no reviews or comments for this scientific paper.

If you have personal experience with Bid Optimization in Broad-Match Ad auctions, we encourage you to share that experience with our LandOfFree.com community. Your opinion is very important and Bid Optimization in Broad-Match Ad auctions will most certainly appreciate the feedback.

Rate now

Comments { 0 }

Profile ID: LFWR-SCP-O-66440