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Towards a Generic Bidding Standard for Online Advertising

Sihem Amer-Yahia

Sebastien Lahaie

David Pennock

Yahoo! Research

ResearchResearch

Advertising Then and Now• Then: Think real estate

Phone callsManual negotiation“Half doesn’t work”

• Now: Think Wall StreetComputer learns what ad is bestComputer mediates ad sales: AuctionComputer measures which ads workAdvertisers buy contextual events:

User i views/clicks/convertson page j at time t

automation automation automation

ResearchResearch

Today and Tomorrow• Today:

Multiple competing “black box” networksProprietary data and interfacesSilo-ed ad types (display, search, contextual, affiliate), largely historical artifacts

• Tomorrow (hopefully):Open standard bidding languageFor advertisers and publishersPortable among ad networksUnified ad types

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The Pitch

• An open standard for advertisers (& publishers) to describe their campaign goals that• Is expressive -- lets advertisers state

different value for different (bundles of) contextual events

• Is extensible -- doomed to fail otherwise• Is efficient -- is amenable to tractable

allocation and pricing algorithms

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Why?

• Advertisers benefit most– Portability, choice– Flexibility, targeting

• Small publishers/networks & ad agencies: Reduced startup/switching costs

• Technology providers: New markets for analytics, campaign management tools

• Users: Better ads, maybe• Academics: Opens up black boxes

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Why? Because.

• Open standards are flourishing despite non-obvious economics– Open source, wikinomics– APIs, widgets, mashups– Microformats– End of DRM– DomainKeys– OpenX.com– Openness one of Yahoo!’s three “Big Bets”, and

the only economically non-obvious one

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Why Not?

• Largest networks & ad agencies may lose their “lock in”, have little incentive to join

• Sounds good in theory -- is a common standard even possible in practice? Microformats hard enough -- an ad language is massively more complex

• Online ad space evolving too fast -- not ready for standards yet

• Some features of current networks (e.g., real-time bidding based on “pixeled” users) inevitably will not be part of the standard

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Language design goals

• Expressive

– DG1: Advertisers should be able to specify the type of campaign they want to instigate

– DG2: Advertisers should be able to specify their willingness to pay for individual contextual events

– DG3: Advertisers should be able to specify volume constraints over bundles of contextual events

– DG4: Advertisers should be able to specify budget constraints for their campaigns

– DG5: Advertisers should be able to specify contingency upon which payment will be made

– DG10: Publishers should be able to formally state the semantics used to interpret instances of the language

• Extensible

– DG6: The language should be extensible with respect to new targeting dimensions

– DG7: The language should be extensible with respect to new bidding mechanisms

• Efficient

– DG8: The language should allow for static checking of unrecognized or forbidden targeting dimensions, forbidden bids, and forbidden volume constraints

– DG9: The language should allow for efficient allocation and pricing algorithms

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Ad Serving Engine

Ad campaigns in XML

Advertisers

Ad processing platform

Ad inventory database

compilercommon data structure

Standard Data Access Layer

Get inventoryUpdate budgetUpdate impressions

Pricing, allocation, spend managementalgorithms

Ad NetworksPublishers

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Language definition and semantics

• A campaign is associated to an advertiser and is described by:

• adv is an advertiser id type is the campaign type (SS,DA,CA) id is the campaign identifier Budget is the advertiser's budget expr is an expression identifying an event (signal)

• Each expr is of the form:

)(),(),(exp 332211 valattvalattvalattr =≤≥=

r)words,udget, keyreative, bription, c, id, desc(adv, type exp

)(),(),25( northpositionCAlocationage ==≥

)r, . . . , r(p, bids, kexpexp 1

),, (type,valbid maxmin=

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Nesting

• Tree structure • Forest (additive)

• Google, Microsoft, Yahoo! offer this

QuickTime™ and aTIFF (LZW) decompressor

are needed to see this picture.

QuickTime™ and aTIFF (LZW) decompressor

are needed to see this picture.

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Nesting

QuickTime™ and aTIFF (LZW) decompressor

are needed to see this picture.

In general, nodes further annotated with volume constraints

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Language syntax: XML

• Flexible syntax which allows optional elements (needed for dimensions and bids)

• Tree structure facilitates nesting contextual events (signals) and helps to target more specific population segments

• Wide availability of XML tools (e.g., parsers and query engines) facilitates data processing

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Display Advertising

<campaign type=“DA" adv="156" id="adv156-1" budget="$1000">

<description>sale to young adults</description>

<creative>Buy one get one free</creative>

<expr>

<dimension name="age" op= "=" value="[25-34]"/>

<bids> <cpm val="0.4" min="0" max="500"/> </bids>

</expr>

</campaign>

Other dimensions:

<dimension name="location“ op="=“ values="{CA,FL,WI,IL,TX}"/>

<dimension name="time" op="=" value="{am,pm}"/>

<dimension name="day" op="=" value="[Fri-Sun]"/>

<dimension name="position" op="=" value="south"/>

<creative>http://www.nike-camp.com/newSneakers.jpg</>

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Display Advertising

<campaign type=“DA" adv="156" id="adv156-8" budget="$9000">

<description>sale to young adults</>

<creative>Buy one get one free</>

<expr>

<dimension name="age" op= "=" values="[25-35]"/>

<bids>

<cpm val="0.3" min="20K" max="100K"/>

<cpc val="0.4" min="200"/>

<cpa val="0.6"/>

</bids>

<expr>

<dimension name="location" op="=" values="CA"/>

<bids> <cpm val="0.3" max="50K"/> </bids>

</expr>

<expr>

<dimension name="location“ op="=“ values="{NY,NJ,PA}"/>

<bids> <cpc val="0.4" min="50"/> </bids>

</expr>

</expr>

</campaign>

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Sponsored Search

<campaign type="SS" adv="5438" id="adv5438-78“ budget="$1000">

<description>Cheap Flights to San Francisco</>

<creative>Save Up to 65% On Flights to CA Plus $10 Instant Discount</>

<keywords>"flight promotion“ "New York flight“ "San Francisco flight“ "direct flight"</>

<expr>

<dimension name="location" op="=" val="east-coast"/>

<bids>

<cpc val="0.2"/>

<cpa val="0.5"/>

</bids>

</expr>

</campaign>

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Contextual Advertising

<campaign type="CA" adv="156" id="adv156-1 "budget="$1500">

<description>male sneaker sale</>

<creative>Buy one get one free</>

<keywords>"promotion“ "sneakers“ "sports“ "running shoes“ "basketball"</>

<expr>

<dimension name="gender" op="=" values="male"/>

<bids>

<cpc val="0.4"/>

<cpa val="0.6" max="300"/>

</bids>

<expr>

<dimension name="position" op="=" values="north">

<bids> <cpm val="0.2"/> </bids>

</expr>

</expr>

</campaign>

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Efficiency

• Static checking for logical errors

• Allocation depends on network interpretation: How to convert values on individual contextual events to values on bundles?– Greedy online allocation

(sponsored search, ad exchange model)

– Volume constraints only => PolytimeSee: “An Expressive Auction Design for Online Display Advertising”, Lahaie et al., AAAI-2008

– Budget constraints only => PolytimeSee Vazirani

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Agenda

• Implement the language compiler

• Design the API

• Implement pricing and allocation algorithm using the data access API