creators_name: Even Dar, Eyal
creators_name: Mirrokni, Vahab S.
creators_name: Muthukrishnan, S.
creators_name: Mansour, Yishay
creators_name: Nadav, Uri
type: conference_item
datestamp: 2009-04-06 19:08:59
lastmod: 2009-04-07 14:02:16
metadata_visibility: show
title: Bid Optimization for Broad Match Ad Auctions
ispublished: pub
full_text_status: public
pres_type: paper
abstract: 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 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 a linear programming (LP)-based polynomialtime 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.
date: 2009-04
pagerange: 231-231
event_title: 18th International World Wide Web Conference
event_location: Madrid, Spain
event_dates: April 20th-24th, 2009
event_type: conference
refereed: TRUE
citation: Even Dar, Eyal <http://www2009.eprints.org/view/author/Even_Dar=3AEyal=3A=3A.html> and Mirrokni, Vahab S. <http://www2009.eprints.org/view/author/Mirrokni=3AVahab_S=2E=3A=3A.html> and Muthukrishnan, S. <http://www2009.eprints.org/view/author/Muthukrishnan=3AS=2E=3A=3A.html> and Mansour, Yishay <http://www2009.eprints.org/view/author/Mansour=3AYishay=3A=3A.html> and Nadav, Uri <http://www2009.eprints.org/view/author/Nadav=3AUri=3A=3A.html> (2009) Bid Optimization for Broad Match Ad Auctions. In: 18th International World Wide Web Conference, April 20th-24th, 2009, Madrid, Spain.
document_url: http://www2009.eprints.org/24/1/p231.pdf