Computational Learning Theory Spring Semester , 2009 / 10 Lecture 11 : Sponsored search

Search engines like Google and Yahoo! monetize their services by auctioning off advertising space next to their search results. For example, Apple may bid to appear among the advertisements whenever users search for ”ipod”. These sponsored results look similar to the search results. Each position in the sponsored results is called Slot. Generally, advertisements that appear in a higher ranked slot (higher on the page) garner more attention and more clicks from users. Thus, all else being equal, merchents generally prefer higher ranked slots to lower ranked slots. Advertisers bid for placement on the page in an auction-style format where the higher their-bid the more likely their adverstiment will appear above other advertisements on the page. By convension, sponsored search advertisers generally pay per click, namely, the merchant pays only when the user clicks on the adverstiment.