As sponsored search becomes increasingly important as an advertising medium for firms, search engines are exploring more advanced bidding and ranking mechanisms to increase their revenue from sponsored search auctions. For instance, Google, Yahoo! and Bing are investigating auction mechanisms in which each advertiser submits two bids: one bid for the standard display format in which multiple ad...

There are two kinds of bidders in sponsored search: most keep their bids static for long periods of time, but some do actively manage their bids. In this work we develop a model of bidder behavior in sponsored search that applies to both active and inactive bidders. Our observations on real keyword auction data show that advertisers see substantial variation in rank, even if their bids are stat...

We present a very brief history of the origins of sponsored search, which is the presentation of text advertisements in response to a user’s search query.

When emerging technologies such as Search Engine Marketing (SEM) face tasks that require human level intelligence, it is inevitable to use the knowledge repositories to endow the machine with the breadth of knowledge available to humans. Keyword suggestion for search engine advertising is an important problem for sponsored search and SEM that requires a goldmine repository of knowledge. A recen...

Sponsored search auctions (SSAs) have attracted much research attention in recent years and different equilibrium concepts have been studied to understand advertisers’ behaviors. However, the assumption that bidders are perfectly rational in these studies is unrealistic in the real world. In this work, we investigate the quantal response equilibrium (QRE) for SSAs. QRE is powerful in characteri...

The practice of sponsored search advertising—where advertisers pay a fee to appear alongside particular Web search results—is now one of the largest and fastest growing source of revenue for Web search engines. We model and compare several mechanisms for allocating sponsored slots, including stylized versions of those used by Overture and Google, the two biggest brokers of sponsored search. The...

Sponsored search auctions have attracted much research attention in recent years and different equilibrium concepts have been studied to understand advertisers’ bidding strategies. However, the assumption that bidders are perfectly rational in these studies is unrealistic in the real world. In this work, we investigate the quantal response equilibrium (QRE) solution concept for sponsored search...

A common approach to analyzing repeated auctions, such as sponsored search auctions, is to treat them as complete information games, because it is assumed that, over time, players learn each other’s types. This overlooks the possibility that players may impersonate another type. In this paper, we show that many standard auctions, including the Kelly mechanism, generalized second price auctions,...

In the sponsored search system, advertisers bid on keywords that are related to their products or services to participate in repeated auctions and display their ads on the search result pages. Since there is a huge inventory of possible terms, instructive keyword recommendation is an important component to help advertisers optimize their campaigns and improve ad monetization. In this paper, by ...

A well-known result due to Vickery gives a mechanism for selling a number of goods to interested buyers in a way that achieves the maximum social welfare. In practice, a problem with this mechanism is that it requires the buyers to specify a large number of values. In this paper we study the problem of designing optimal mechanisms subject to constraints on the complexity of the bidding language...