Truthful Auctions for Automated Bidding in Online Advertising

Automated bidding, an emerging intelligent decision making paradigm powered by machine learning, has become popular in online advertising. Advertisers in automated bidding evaluate the cumulative utilities and have private financial constraints over multiple ad auctions in a long-term period. Based on these distinct features, we consider a new ad auction model for automated bidding: the values of advertisers are public while the financial constraints, such as budget and return on investment (ROI) rate, are private types. We derive the truthfulness conditions with respect to private constraints for this multi-dimensional setting, and demonstrate any feasible allocation rule could be equivalently reduced to a series of non-decreasing functions on budget. However, the resulted allocation mapped from these non-decreasing functions generally follows an irregular shape, making it difficult to obtain a closed-form expression for the auction objective. To overcome this design difficulty, we propose a family of truthful automated bidding auction with personalized rank scores, similar to the Generalized Second-Price (GSP) auction. The intuition behind our design is to leverage personalized rank scores as the criteria to allocate items, and compute a critical ROI to transform the constraints on budget to the same dimension as ROI. The experimental results demonstrate that the proposed auction mechanism outperforms the widely used ad auctions, such as first-price auction and second-price auction, in various automated bidding environments

Machine learning for targeted display advertising: Transfer learning in action

This paper presents a detailed discussion of problem formulation and data representation issues in the design, deployment, and operation of a massive-scale machine learning system for targeted display advertising. Notably, the machine learning system itself is deployed and has been in continual use for years, for thousands of advertising campaigns (in contrast to simply having the models from the system be deployed). In this application, acquiring sufficient data for training from the ideal sampling distribution is prohibitively expensive. Instead, data are drawn from surrogate domains and learning tasks, and then transferred to the target task. We present the design of this multistage transfer learning system, highlighting the problem formulation aspects. We then present a detailed experimental evaluation, showing that the different transfer stages indeed each add value. We next present production results across a variety of advertising clients from a variety of industries, illustrating the performance of the system in use. We close the paper with a collection of lessons learned from the work over half a decade on this complex, deployed, and broadly used machine learning system.Statistics Working Papers Serie

User Interaction with Online Advertisements: Temporal Modeling and Optimization of Ads Placement

We consider an online advertisement system and focus on the impact of user interaction and response to targeted advertising campaigns. We analytically model the system dynamics accounting for the user behavior and devise strategies to maximize a relevant metric called click-through-intensity (CTI), defined as the number of clicks per time unit. With respect to the traditional click-through-rate (CTR) metric, CTI better captures the success of advertisements for services that the users may access several times, making multiple purchases or subscriptions. Examples include advertising of on-line games or airplane tickets. The model we develop is validated through traces of real advertising systems and allows us to optimize CTI under different scenarios depending on the nature of ad delivery and of the information available at the system. Experimental results show that our approach can increase the revenue of an ad campaign, even when user’s behavior can only be estimated