Aggregation Bias in Sponsored Search Data: The Curse and the Cure

Recently there has been significant interest in studying consumer behavior in sponsored search advertising (SSA). Researchers have typically used daily data from search engines containing measures such as average bid, average ad position, total impressions, clicks, and cost for each keyword in the advertiser’s campaign. A variety of random utility models have been estimated using such data and the results have helped researchers explore the factors that drive consumer click and conversion propensities. However, virtually every analysis of this kind has ignored the intraday variation in ad position. We show that estimating random utility models on aggregated (daily) data without accounting for this variation will lead to systematically biased estimates. Specifically, the impact of ad position on click-through rate (CTR) is attenuated and the predicted CTR is higher than the actual CTR. We analytically demonstrate the existence of the bias and show the effect of the bias on the equilibrium of the SSA auction. Using a large data set from a major search engine, we measure the magnitude of bias and quantify the losses suffered by the search engine and an advertiser using aggregate data. The search engine revenue loss can be as high as 11% due to aggregation bias. We also present a few data summarization techniques that can be used by search engines to reduce or eliminate the bias

Essays in Online Advertising

The last several years have seen a dramatic increase in the amount of time and money consumers spend online. As a consequence, the Internet has become an important channel that firms can use to reach out and connect to consumers which has lead to the emergence of online advertising.Given the scale and novelty of online advertising, there is a growing need to understand how consumers respond to online ads and how firms should advertise using this medium. In my dissertation, I study different aspects of sponsored search and display ads which constitute the bulk of online advertising. In the first essay, I focus on the issues related to the use of aggregate data in sponsored search. I demonstrate that models commonly used in sponsored search research suffer from aggregation bias and present the implications of this aggregation bias. In the second essay, I focus on the advertiser\u27s problem of bidding optimally in sponsored search auctions. In the third essay, I study the interactions between various forms of online advertising like banner ads, display ads and sponsored search ads and address the problem of attribution

WWW 2007 / Track: Search Session: Advertisements and Click Estimates ABSTRACT Robust Methodologies for Modeling Web Click Distributions

Metrics such as click counts are vital to online businesses but their measurement has been problematic due to inclusion of high variance robot traffic. We posit that by applying statistical methods more rigorous than have been employed to date that we can build a robust model of the distribution of clicks following which we can set probabilistically sound thresholds to address outliers and robots. Prior research in this domain has used inappropriate statistical methodology to model distributions and current industrial practice eschews this research for conservative ad-hoc click-level thresholds. Prevailing belief is that such distributions are scale-free power law distributions but using more rigorous statistical methods we find the best description of the data is instead provided by a scale-sensitive Zipf-Mandelbrot mixture distribution. Our results are based on ten dataset