As an old price-discovering mechanism, auction entered the economics literature relatively recently. The full flowering of theory came only at the end of the 1970s. But this old mechanism plays a significant role in the Internet era. The development of e-commerce has given auction newfound vitality. Meanwhile, e-auction is rapidly becoming a new business mode. But in the area of b2b e-business,...

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...

We study the impact of changes in the position of competing listings in organic search results on the performance of sponsored search advertisements. Using data for several keywords from an online retailer’s ad campaign, we measure the impact of organic competition on both click-through rate and conversion rate of sponsored search ads for these keywords. We find that changes in the position of ...

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...

Sponsored search auctions are the main source of revenue for search engines. In such an auction, a set of utility-maximizing advertisers compete for a set of ad slots. The assignment of advertisers to slots depends on bids they submit; these bids may be different than the true valuations of the advertisers for the slots. Variants of the celebrated VCG auction mechanism guarantee that advertiser...

Sponsored search auctions provide a marketplace where advertisers can bid for millions of advertising opportunities to promote their products. The main difficulty facing the advertisers in this market is the complexity of picking and evaluating keywords and phrases to bid on. This is due to the sheer number of possible keywords that the advertisers can bid on, and leads to inefficiencies in the...

There has been significant recent interest in studying consumer behavior in sponsored search environments. Sponsored search is the fastest growing form of advertising on the Internet. A number of factors have contributed to this growth. The ads tend to be highly targeted and offer a higher return on investment for advertisers compared to other marketing methods. In addition the large audience i...

Most sponsored search auctions use the Generalized Second Price (GSP) rule. Given the GSP rule, they try to give an optimal allocation, an easy task when the only need is to allocate ads to slots. However, when other practical conditions must be fulfilled –such as budget constraints, exploration of the performance of new ads, etc.– optimal allocations are hard to obtain. We provide a method to ...

We present a characterization of empirical price data from sponsored search auctions. We show that simple models drawing bid values independently from a fixed distribution can be tuned to match empirical data on average, but still fail to account for deviations observed in individual auctions. Hypothesizing that these deviations are due to strategic bidding, we define measures of “jamming” beha...

We study the problem of designing envy-free sponsored search auctions, where bidders are budgetconstrained. Our primary goal is to design auctions that maximize social welfare and revenue — two classical objectives in auction theory. For this purpose, we characterize envy-freeness with budgets by proving several elementary properties including consistency, monotonicity and transitivity. Based o...