Sponsored Search Auctions with Rich Ads

TL;DR

This paper introduces a new auction mechanism for rich search ads that optimizes ad placement globally and computes prices with properties similar to GSP, addressing challenges posed by diverse ad formats.

Contribution

The paper presents a novel auction design tailored for rich ads, combining global optimization and pricing algorithms suitable for real-time search platforms.

Findings

Effective auction mechanism implemented in Yahoo's Gemini platform.

Achieved properties similar to GSP for complex ad formats.

Demonstrated real-time performance and scalability.

Abstract

The generalized second price (GSP) auction has served as the core selling mechanism for sponsored search ads for over a decade. However, recent trends expanding the set of allowed ad formats---to include a variety of sizes, decorations, and other distinguishing features---have raised critical problems for GSP-based platforms. Alternatives such as the Vickrey-Clarke-Groves (VCG) auction raise different complications because they fundamentally change the way prices are computed. In this paper we report on our efforts to redesign a search ad selling system from the ground up in this new context, proposing a mechanism that optimizes an entire slate of ads globally and computes prices that achieve properties analogous to those held by GSP in the original, simpler setting of uniform ads. A careful algorithmic coupling of allocation-optimization and pricing-computation allows our auction to operate within the strict timing constraints inherent in real-time ad auctions. We report performance results of the auction in Yahoo's Gemini Search platform.