Real Time Bid Optimization with Smooth Budget Delivery in Online Advertising.pdf

Real Time Bid Optimization with Smooth Budget Delivery in Online Advertising Kuang-Chih Lee klee@ Turn Inc Ali Jalali ajalali@ Turn Inc Ali Dasdan adasdan@ Turn Inc May 15, 2013 Abstract Today, billions of display ad impressions are purchased on a daily basis through a public auction hosted by real time bidding (RTB) exchanges. A decision has to be made for advertisers to submit a bid for each selected RTB ad request in milliseconds. Restricted by the budget, the goal is to buy a set of ad impressions to reach as many targeted users as possible. A desired action (conversion), advertiser specific, includes purchasing a product, filling out a form, signing up for emails, etc. In addition, advertisers typically prefer to spend their budget smoothly over the time in order to reach a wider range of audience accessible throughout a day and have a sustainable impact. However, since the conversions occur rarely and the occurrence feedback is normally delayed, it is very challenging to achieve both budget and performance goals at the same time. In this paper, we present an online approach to the smooth budget delivery while optimizing for the conversion performance. Our algorithm tries to select high quality impressions and adjust the bid price based on the prior performance distribution in an adaptive manner by distributing the budget optimally across time. Our experimental results from real advertising campaigns demonstrate the effectiveness of our proposed approach. 1 Introduction In recent years, the amount of ad impressions sold through real time bidding (RTB) exchanges has had a tremendous growth. RTB exchanges provide a technology for advertisers to algorithmically place a bid on any individual impression through a public auction. This functionality enables advertisers to buy inventory in a cost effective manner, and serve ads to the right person in the right context at the right time. How- ever, in order to realize such functionality, advertisers need to intelligentl