NIPS ˙08 Workshop: Beyond Search - Computational Intelligence for the Web

Internet Advertising and Optimal Auction Design

author: Michael Schwarz, Yahoo! Research

Description

This talk describes the optimal (revenue maximizing) auction for sponsored search advertising. We show that a search engine's optimal reserve price is independent of the number of bidders. Using simulations, we consider the changes that result from a search engine's choice of reserve price and from changes in the number of participating advertisers.

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*Slides*
0:00	Internet Advertising and Optimal Auction Design
0:57	Four for One Special
1:47	Humorous History of Market Design
19:55	Mechanism Design–Literal Interpretation
21:50	“Designed Mechanisms” v. “Metaphors” in the Internet Age
22:01	Yahoo search - user view
23:24	Yahoo search - bidder view
25:25	History
28:29	history of a query (1)
28:47	history of a query (2)
31:34	History (continued)
33:10	GSP and the Generalized English Auction
33:32	Strategy can be represented by pi(k,h,si)
33:34	Theorem
37:00	The Intuition of the Proof
37:02	Optimal Mechanism
40:32	Percent increase in search engine revenue when search engines set optimal reserve prices
41:14	Total increase in each advertiser's payment, when reserve price is set optimally versus at $0.10
43:05	Theorem
43:10	Total increase in each advertiser's payment, when reserve price is set optimally versus at $0.10
43:40	Theorem
43:58	Total increase in each advertiser's payment, when reserve price is set optimally versus at $0.10
44:20	Theorem
44:24	Total increase in each advertiser's payment, when reserve price is set optimally versus at $0.10
46:12	Theorem
46:19	Yahoo! Research is not Just About Sponsored Search
47:53	The End!
48:03	- questions

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