an overview of search advertising

Search Advertising Overview

Ali Dasdan, Yahoo!

Disclaimers: This talk presents the opinions of the author. Some of the proposals have been submitted as patent applications.

Outline

  Overall advertising market   Online advertising overview   Search advertising introduction   Output bidding

  New search advertising model

  Opportunities   Conclusions

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Advertising market size & growth predictions

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Online advertising overview & examples

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Online advertising

  Goal:   find the “best match” between an ad

and a context to maximize “value” for all stakeholders

  Context:   browse, search, connect, etc.

  Stakeholders   users, advertisers, publishers,

auctioneers

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Context to Ad Matching

  Browse

  Search

  Connect

  Buy, sell

  Learn, entertain

  Display   banner, rich media,

sponsorship

  Search   Input (keyword),

output

  Content   Social   Classifieds, referrals   Email

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Context to Ad Matching

  Browse

  Search

  Connect

  Buy, sell

  Learn, entertain

  Display   banner, rich media,

sponsorship

  Search   Input (keyword),

output

  Content   Social   Classifieds, referrals   Email

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More context parameters

  Performance   ad relevance, past or expected performance, impression, click, conversion

  Behavioral   search query intent (navigational, informational, transactional)   browse or search history

  Geographic   language, country, region, city, any polygon around a center

  Demographics   gender, age, profession, income

  Temporal   workday, weekend, daytime, nighttime, month, season

  Monetary   bid, budget

  Content   URL, text, topic, color, form factor

  …

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Main stakeholders of online advertising

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Publisher, content owner

User Auctioneer, network, exchange

Advertiser, agency

Often in multiple roles

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Stakeholders in an ad exchange

Examples: Display ads

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Examples: Display ads

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Examples: Display ads in social network

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Examples: Content ads

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Examples: Content ads

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Search advertising overview & examples

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Search results page for the query “air conditioner”

Input Output

Sponsored results

Organic results

Oth

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sefu

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Search results page for the query “air conditioner”

Examples: Keyword ads for [barack obama]

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Examples: Keyword ads for [new york university]

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Evolution of search results pages

  Search results pages from major search engines follow…

  Search results pages have improved beyond the “10 blue links” with   query facets, results classification   rich results, rich ads   related searches, related results/sites   local results   video & image results   news & (micro)blog results   …

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Y! presentation modules   Shortcuts   Search suggestions / Search Assist

  Quick links

  Indentation

  Rich results

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Local business results

Shopping results

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Search results page for the query “air conditioner”

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Rich ad

Organic result

Quiz: A or B is better?

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A

B

A B

Quiz: A or B is better?

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A

A

B

B

Where users focus

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Where users focus

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Reading (Yahoo! Finance) Scanning (Yahoo! Finance)

A brief history of keyword advertising

  Early 1990s: Open Text & AltaVista try it but fail.   Feb 1998: GoTo introduces it for paid search.

  the idea is from yellowpages   May 1999: GoTo files for a patent application.   Oct 2000: Google introduces AdWords.

  after two unsuccessful internal attempts   Jul 2001: GoTo gets patent #6,269,361.   Oct 2001: GoTo renames to Overture.   Apr 2002: Overture sues Google.   May 2002: Google hires Hal Varian as its chief economist.   Mar 2003: Google acquires Applied Semantics & introduces

its AdSense contextual advertising service.   Jul 2003: Yahoo! acquires Overture.   Aug 2004: Yahoo! & Google settle the case out of court.

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Keyword advertising patent (Goto Overture Yahoo!)

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Cost & performance measures

  Cost measures   CPM: Cost per 1000x impressions

  the original model   CPC: Cost per click, pay per click

  Yahoo! has been using since 1996.   CPA: Cost per action

  action: acquisition, order, engagement   DoubleClick has been using since 1997.

  Performance measures   Click thru rate (ctr): P(click|impression)   Conversion rate: P(action|click)

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Ranking ads & pricing clicks

  Ranking in decreasing r = w * b   by bid: r = b = bid   by expected revenue: r = ctr * b   by performance: r = f(…) * bs

  Pricing   generalized second price (gsp):

  min price (+ε) to keep the current position   e.g., the ith pays (wi+1*bi+1)/wi+0.01

  last position holder to pay a reserve price

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Illustration

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Output bidding, a new search advertising model

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Summary of output bidding

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y = f ( x ) Search results

(output) Search engine Search query

(input)

Keyword (input) bidding is on x. Output bidding is on y.

Note: •  y >> x in size & context •  y is where innovation happens

Review of input & output

  Search engine as a mapping:   Output = SE( Input ) y = f( x )

  Input: What users give to SEs   a few keywords as a query   very limited (given) context

  Output: What SEs produce   lots of data and metadata   far richer context & getting richer   where innovation happens

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Intent bidding & ad association

  What do advertisers bid on?   users’ (purchasing) intent   signal for intent: keywords

  How do advertisers bid?   associate their ads with keywords

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Output bidding proposal

  Claims   use output as a far richer signal for

intent   associate ads with output too

  Proposal   direct use: Bidding on output explicitly   indirect use: Use of output as part of

input bidding

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Output bidding variations

  Paid (self) association (PA): Ads with organic results from the same site

  More expressive input bidding:   Output as conditions: Conditions on output parameters   Output as expansion: “Keywords” from output for

keyword bidding   Direct output bidding:

  Bid for organic search result, show ad closeby

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Sponsored: Discount on air conditioners

Issues to resolve

  Mindset – probably the most difficult issue   User interface: New ads as an extension of sponsored results

space or next to target organic result? News ads shown with mouse over or always on?

  Auction modeling: What if an advertiser bids for both input and output, or multiple outputs? How not to undermine input bidding revenue with output bidding? What is the role of organic content publisher in auctions regarding its content?

  Search advertising: Should ‘Ace Hardware’ be just a “organic related site” instead of a “sponsored related site” to ‘Home Depot’? Should search engines charge for commercial-looking organic results (local business, shopping, etc.)?

  Implementation: How to hide the latency of output dependence?

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Benefits & limitations

  Benefits   taking better advantage of content &

search engine investments   better ad targeting and relevance with

richer context   potentially establishing publishers as a

first-class partner to search auctions   Limitations

  search engines manipulating their organic content based on output bids?

  Not likely due to potential loss of relevance

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Related work

  Output bidding   Dasdan (2007) – conceived in early 2006; Dasdan & Gonen

(2008);   Bids on search results

  Dasdan (2007); Manavoglu, Popescul, Dom, & Brunk (2008).   Interplay between organic and sponsored results

  Ghose & Yang (2009); Katona & Sarvary (2009); Xu, Chen, & Whinston (2009).

  Bids on more parameters of input bidding   Aggarwal, Feldman, & Muthukrishnan (2006); Muthukrishnan

(2009); Benisch, Sadeh, & Sandholm (2008).   Use of top search results for enhancing keyword context

and ad matching   Broder, Ciccolo, Fontoura, Gabrilovich, Josifovski, & Riedel

(2008).

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Questions & opportunities

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Local business results

Shopping results

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Should such results be sponsored too?

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For the query “zappos”, what is the need for the two results (one organic and one ad) for zappos.com? Should the ‘similar to this’ sites stay organic?

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Rich ad

Organic result

For the query “charles schwab”, what is the need for the two results (one organic and one ad) for schwab.com?

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What are the potential uses of the box on the right, which allows a peek into the destination page?

Short list

  Theory and practice of output bidding   Fusing organic & sponsored processing

pipelines   Bringing publishers to search auction

  Interactions between organic and sponsored results

  New opportunities for ads in search results pages

  Ads for shopping lists (e.g., ebay results)   Life with a few, very powerful players

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Conclusions

  Web search and advertising at the intersection of many scientific disciplines

  Lots of challenges but huge rewards   uncertainty, scale

  Too early to call the field advanced beyond reach   so help invent its future

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Thank you

Q&A

http://www.dasdan.net/ali/

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Thank you

Q&A

Misc

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Experimental Results 1/2

  Hypothesis #1: An ad has higher CTR if it is correlated to an organic result.   Correlation: Being from the same site   Dataset: Queries from 3 days of Yahoo!

Web Search logs   Result: 3x & 10x CTR increases for non-

navigational and navigational queries

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Experimental Results 2/2

  Hypothesis #2: Organic results do contain terms to match for (input bidding) ads.   Dataset: 100 queries producing no or

few ads   Result: 5x increase in total number of

ads, some queries with lots of ads   See the next figure

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Experimental Results 2/2

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Examples 1/2

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Ads here?

Examples 2/2

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Rank by auction?

Combine?

Content advertising patent application (Google owns)

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http://www.milliondollarhomepage.com/

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