Stochastic models for budget optimization in search-based advertising

Shanmugavelayutham Muthukrishnan, Martin Pál, Zoya Svitkina

    Research output: Chapter in Book/Report/Conference proceedingConference contribution

    Abstract

    Internet search companies sell advertisement slots based on users' search queries via an auction. Advertisers have to determine how to place bids on the keywords of their interest in order to maximize their return for a given budget: this is the budget optimization problem. The solution depends on the distribution of future queries. In this paper, we formulate stochastic versions of the budget optimization problem based on natural probabilistic models of distribution over future queries, and address two questions that arise. Evaluation. Given a solution, can we evaluate the expected value of the objective function? Optimization. Can we find a solution that maximizes the objective function in expectation? Our main results are approximation and complexity results for these two problems in our three stochastic models. In particular, our algorithmic results show that simple prefix strategies that bid on all cheap keywords up to some level are either optimal or good approximations for many cases; we show other cases to be NP-hard.

    Original languageEnglish (US)
    Title of host publicationInternet and Network Economics - Third International Workshop, WINE 2007, Proceedings
    Pages131-142
    Number of pages12
    StatePublished - Dec 1 2007
    Event3rd International Workshop on Internet and Network Economics, WINE 2007 - San Diego, CA, United States
    Duration: Dec 12 2007Dec 14 2007

    Publication series

    NameLecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
    Volume4858 LNCS
    ISSN (Print)0302-9743
    ISSN (Electronic)1611-3349

    Conference

    Conference3rd International Workshop on Internet and Network Economics, WINE 2007
    CountryUnited States
    CitySan Diego, CA
    Period12/12/0712/14/07

    Fingerprint

    Stochastic models
    Stochastic Model
    Marketing
    Query
    Optimization
    Objective function
    Maximise
    Optimization Problem
    Prefix
    Auctions
    Approximation
    Expected Value
    Probabilistic Model
    NP-complete problem
    Internet
    Evaluate
    Evaluation
    Advertising
    Industry

    ASJC Scopus subject areas

    • Theoretical Computer Science
    • Computer Science(all)

    Cite this

    Muthukrishnan, S., Pál, M., & Svitkina, Z. (2007). Stochastic models for budget optimization in search-based advertising. In Internet and Network Economics - Third International Workshop, WINE 2007, Proceedings (pp. 131-142). (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 4858 LNCS).

    Stochastic models for budget optimization in search-based advertising. / Muthukrishnan, Shanmugavelayutham; Pál, Martin; Svitkina, Zoya.

    Internet and Network Economics - Third International Workshop, WINE 2007, Proceedings. 2007. p. 131-142 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 4858 LNCS).

    Research output: Chapter in Book/Report/Conference proceedingConference contribution

    Muthukrishnan, S, Pál, M & Svitkina, Z 2007, Stochastic models for budget optimization in search-based advertising. in Internet and Network Economics - Third International Workshop, WINE 2007, Proceedings. Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics), vol. 4858 LNCS, pp. 131-142, 3rd International Workshop on Internet and Network Economics, WINE 2007, San Diego, CA, United States, 12/12/07.
    Muthukrishnan S, Pál M, Svitkina Z. Stochastic models for budget optimization in search-based advertising. In Internet and Network Economics - Third International Workshop, WINE 2007, Proceedings. 2007. p. 131-142. (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)).
    Muthukrishnan, Shanmugavelayutham ; Pál, Martin ; Svitkina, Zoya. / Stochastic models for budget optimization in search-based advertising. Internet and Network Economics - Third International Workshop, WINE 2007, Proceedings. 2007. pp. 131-142 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)).
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