Budget Pacing for Targeted Online Advertisements: Problem, Solution, and Pass‑Through Rate Mechanism
The article explains the drawbacks of the traditional generalized second‑price auction for online ads, proposes monitoring and probabilistically throttling fast‑spending campaigns using a time‑window based budget pacing model with a Pass‑Through Rate (PTR), and references the related research paper while also offering free resource links.
Background : The generalized second‑price auction is the most widely used billing method for internet advertising, but it causes high‑quality ads to exhaust their budgets quickly, leading to poor advertiser experience, reduced market competition, and lower platform revenue. System latency can also cause overspend, further decreasing revenue.
Solution : Monitor each campaign's budget consumption and, for campaigns that spend too fast, allow participation in auctions with a certain probability to slow down consumption. Each campaign has a daily budget divided into T equal time windows; cumulative consumption up to window t is tracked, and the theoretical budget consumption at window t is calculated based on the estimated full‑day exposure. The probability of allowing participation in each auction is the Pass‑Through Rate (PTR), which is adjusted by a tuning factor.
Paper reference: Budget Pacing for Target Online Advertisements At LinkedIn .
Free Resources : Links are provided for downloading PPT versions of “Internet Core Application Algorithm Treasure Book” and a “Big Data Collection” ebook.
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