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Impression-plus-click auctions

Impression-plus-click auctions Impression-Plus-Click Auctions SHARAD GOEL Yahoo! Research and ´ SEBASTIEN LAHAIE Yahoo! Research and SERGEI VASSILVITSKII Yahoo! Research 1. INTRODUCTION Internet search companies generate the majority of their multibillion dollar revenue from selling ad placement, often in the form of short, textual ads that appear next to web search results. Such sponsored search ads are typically sold via pay-perclick auctions in which advertisers bid for placement, but pay publishers (i.e., search companies) only when users click on their ads. As payments are made only when ads are clicked, publishers consider both the advertiser ™s click bid and also the ad ™s quality (i.e., the probability of it being clicked) when deciding which ads to display [Edelman et al. 2007]. Standard models of sponsored search implicitly assume that the publisher and the advertiser agree on the quality, or click-through rate (CTR), of the ad. However, if an advertiser believes its ad to be of higher quality ”and so more likely to be clicked ”than does the publisher, then the advertiser would expect to pay the publisher with higher probability than the publisher would expect to be paid. Although the CTR estimates of both parties should in principle converge over time, http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png ACM SIGecom Exchanges Association for Computing Machinery

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Publisher
Association for Computing Machinery
Copyright
Copyright © 2009 by ACM Inc.
ISSN
1551-9031
DOI
10.1145/1980522.1980530
Publisher site
See Article on Publisher Site

Abstract

Impression-Plus-Click Auctions SHARAD GOEL Yahoo! Research and ´ SEBASTIEN LAHAIE Yahoo! Research and SERGEI VASSILVITSKII Yahoo! Research 1. INTRODUCTION Internet search companies generate the majority of their multibillion dollar revenue from selling ad placement, often in the form of short, textual ads that appear next to web search results. Such sponsored search ads are typically sold via pay-perclick auctions in which advertisers bid for placement, but pay publishers (i.e., search companies) only when users click on their ads. As payments are made only when ads are clicked, publishers consider both the advertiser ™s click bid and also the ad ™s quality (i.e., the probability of it being clicked) when deciding which ads to display [Edelman et al. 2007]. Standard models of sponsored search implicitly assume that the publisher and the advertiser agree on the quality, or click-through rate (CTR), of the ad. However, if an advertiser believes its ad to be of higher quality ”and so more likely to be clicked ”than does the publisher, then the advertiser would expect to pay the publisher with higher probability than the publisher would expect to be paid. Although the CTR estimates of both parties should in principle converge over time,

Journal

ACM SIGecom ExchangesAssociation for Computing Machinery

Published: Dec 1, 2009

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