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Optimal Keyword Bids in Search-Based Advertising with Stochastic Advertisement Positions.
- Source :
-
Journal of Optimization Theory & Applications . Jan2012, Vol. 152 Issue 1, p225-244. 20p. - Publication Year :
- 2012
-
Abstract
- US expenditures on search-based advertising exceeded $12 billion in 2010. Advertisers bid for keywords, where bid price determines ad placement, affecting click-through and conversion rates. Advertisers must select keywords, allocating each a proportion of their fixed daily budget. In this paper, we construct a stochastic model for the selection and allocation process. We provide analytical results for the single-keyword problem and examine the multiple-keyword problem numerically. We investigate trade-offs between keywords given varying levels of risk and return. We show the implications of enforcing a probabilistic budget constraint. Our paper provides a critical analysis of the advertiser's problem that may guide future research. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00223239
- Volume :
- 152
- Issue :
- 1
- Database :
- Academic Search Index
- Journal :
- Journal of Optimization Theory & Applications
- Publication Type :
- Academic Journal
- Accession number :
- 70207234
- Full Text :
- https://doi.org/10.1007/s10957-011-9886-3