In Part 1 of this series, I said that in real-time bidding, we should “bid truthfully”, i.e. that you should bid whatever it is worth to you to win. To compute this truthful value, given a target cost per action (CPA) for a campaign, I said you could just multiply that target by the computed probability of seeing an action after the impression, and that would give you your bid value.
I added that by calculating an expected cost of winning an auction, you could compute the expected surplus for that auction and that to pace your spending efficiently, you would only bid truthfully when this expected surplus was above some threshold value, and not bid otherwise. This threshold value would be the output of a closed-loop pace control system (described in Part 0) whose job it is to keep the spend rate close to some target.
In Part 3 of this series, I then showed that in fact, the second claim of Part 1 was not optimal and that instead of setting an expected surplus threshold, you should set an expected return-on-investment (ROI) threshold.
In this post, Part 4 of the series, I show that the meaning of “bidding truthfully” can be slipperier than...
In this post, I show that in order to maximize the economic surplus over a whole campaign, the quantity you should look at on an auction-by-auction basis to decide when to bid is actually the expected return on investment (ROI) rather than the expected surplus. At Datacratic, we actually switched to an ROI-based strategy about a year ago but I didn’t get a chance to follow up with a blog post until now.
At Datacratic, one of the product we offer our customers is our real-time bidding (RTB) optimisation that can plug directly into any RTBKit installation. We’re always hard at work to improve our optimisation capabilities so clients can identify valuable impressions for their advertisers. Every bid request is priced independently and real-time feedback is given to the machine learning models. They adjust immediately to changing conditions and learn about data they had not been exposed to during their initial training.
Today is a big day for Datacratic and we couldn’t be more enthusiastic. We are releasing the first open source version of RTBkit, our real time bidding platform, which represents several man-years of effort and is an expression of our vision for what we think a data-driven RTB platform should look like.
Welcome to my little corner of the datacratic blog where I'll be writting about random bits of interesting code that I happen to be working on at the moment. I'll start things off by describing a fun little algorithm that I recently wrestled with, namely, a 3-way trie merge.
Un projet sur lequel notre équipe d'apprentissage machine travaille actuellement est un engin de recommandation qui sert à générer des courriels personnalisés pour les clients d'un magasin en ligne. Le modèle que nous avons développé utilise l'historique de navigation et d'achats des utilisateurs du site. Chaque utilisateur est représenté par la combinaison de l'ensemble des produits avec lesquels il a interagi ainsi que leur relation avec chacun des produits que nous pouvons lui recommander.
When you bid truthfully and pace economically, you are always trying to allocate your budget to the auctions which look like the best deals, whether that means that the user is very likely to click, or that the price is low because fewer bidders are in the running or there is no publisher price floor.