Optimal dynamic multi-keyword bidding policy of an advertiser in search-based advertising
Sponsored search advertisement allows advertisers to target their messages to appropriate customer segments at low costs. While search engines are interested in auction mechanisms that boost their revenues, advertisers seek optimal bidding strategies to increase their net sale revenues for multiple...
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| Veröffentlicht in: | Mathematical methods of operations research (Heidelberg, Germany) Germany), 2023-02, Vol.97 (1), p.25-56 |
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| container_title | Mathematical methods of operations research (Heidelberg, Germany) |
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| creator | Dayanik, Savas Sezer, Semih O. |
| description | Sponsored search advertisement allows advertisers to target their messages to appropriate customer segments at low costs. While search engines are interested in auction mechanisms that boost their revenues, advertisers seek optimal bidding strategies to increase their net sale revenues for multiple keywords under strict daily budget constraints in an environment where keyword query arrivals, competitor bid amounts, and user purchases are random. We focus on the advertiser’s question and formulate her optimal intraday dynamic multi-keyword bidding problem as a continuous-time stochastic optimization problem. We solve the problem, characterize an optimal policy, and bring a numerical algorithm for implementation. We also illustrate our optimal bidding policy and its benefits over heuristic solutions on numerical examples. |
| doi_str_mv | 10.1007/s00186-022-00803-y |
| format | Article |
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| subjects | Advertisers Advertising Algorithms Auctions Bids Budgets Business and Management Calculus of Variations and Optimal Control Optimization Competition Dynamic programming Mathematics Mathematics and Statistics Numerical analysis Operations research Operations Research/Decision Theory Optimization Original Article Revenue Search engines |
| title | Optimal dynamic multi-keyword bidding policy of an advertiser in search-based advertising |
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