Deepak Agarwal, Souvik Ghosh, Kai Wei, and Siyu You

In the Proceedings of the 20th ACM SIGKDD international conference on Knowledge discovery and data mining (KDD 2014)



Targeted online advertising is a prime source of revenue for many Internet companies. It is a common industry practice to use a generalized second price auction mechanism to rank advertisements at every opportunity of an impression. This greedy algorithm is suboptimal for both advertisers and publishers when advertisers have a finite budget. In a greedy mechanism high performing advertisers tend to drop out of the auction marketplace fast and that adversely affects both the advertiser experience and the publisher revenue. We describe a method for improving such ad serving systems by including a budget pacing component that serves ads by being aware of global supply patterns. Such a system is beneficial for both advertisers and publishers. We demonstrate the benefits of this component using experiments we conducted on advertising at LinkedIn.