Bid Optimization for Offsite Display Ad Campaigns on eCommerce

TL;DR

This paper presents a bid optimization system for Walmart's offsite display ad campaigns that automatically segments ad request space, assesses impression quality, and iteratively adjusts bids to improve ROAS and conversion rates.

Contribution

It introduces a novel bid optimization approach leveraging DSP-provided dimensional bidding functions, with automatic segmentation and iterative bid landscape approximation.

Findings

Increased ROAS and conversion rate in initial A/B tests

Reduced effective cost per mille for ad serving

Effective bid adjustments based on impression quality signals

Abstract

Online retailers often use third-party demand-side-platforms (DSPs) to conduct offsite advertising and reach shoppers across the Internet on behalf of their advertisers. The process involves the retailer participating in instant auctions with real-time bidding for each ad slot of their interest. In this paper, we introduce a bid optimization system that leverages the dimensional bidding function provided by most well-known DSPs for Walmart offsite display ad campaigns. The system starts by automatically searching for the optimal segmentation of the ad requests space based on their characteristics such as geo location, time, ad format, serving website, device type, etc. Then, it assesses the quality of impressions observed from each dimension based on revenue signals driven by the campaign effect. During the campaign, the system iteratively approximates the bid landscape based on the data observed and calculates the bid adjustments for each dimension. Finally, a higher bid adjustment factor is applied to dimensions with potentially higher revenue over ad spend (ROAS), and vice versa. The initial A/B test results of the proposed optimization system has shown its effectiveness of increasing the ROAS and conversion rate while reducing the effective cost per mille for ad serving.