One Model, Two Markets: Bid-Aware Generative Recommendation

TL;DR

GEM-Rec is a unified generative recommendation framework that incorporates commercial relevance and monetization, using control tokens and bid-aware decoding to optimize ad placement and revenue without retraining.

Contribution

It introduces control tokens and a bid-aware decoding mechanism to integrate monetization objectives directly into generative recommendation models.

Findings

Enables dynamic optimization of relevance and revenue.

Guarantees allocation monotonicity with respect to bids.

Improves platform revenue without retraining the model.

Abstract

Generative Recommender Systems using semantic ids, such as TIGER (Rajput et al., 2023), have emerged as a widely adopted competitive paradigm in sequential recommendation. However, existing architectures are designed solely for semantic retrieval and do not address concerns such as monetization via ad revenue and incorporation of bids for commercial retrieval. We propose GEM-Rec, a unified framework that integrates commercial relevance and monetization objectives directly into the generative sequence. We introduce control tokens to decouple the decision of whether to show an ad from which item to show. This allows the model to learn valid placement patterns directly from interaction logs, which inherently reflect past successful ad placements. Complementing this, we devise a Bid-Aware Decoding mechanism that handles real-time pricing, injecting bids directly into the inference process to steer the generation toward high-value items. We prove that this approach guarantees allocation monotonicity, ensuring that higher bids weakly increase an ad's likelihood of being shown without requiring model retraining. Experiments demonstrate that GEM-Rec allows platforms to dynamically optimize for semantic relevance and platform revenue.