Dual Based DSP Bidding Strategy and its Application
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In recent years, RTB(Real Time Bidding) becomes a popular online advertisement trading method. During the auction, each DSP is supposed to evaluate this opportunity and respond with an ad and corresponding bid price. Generally speaking, this is a kind of assginment problem for DSP. However, unlike traditional one, this assginment problem has bid price as additional variable. It's essential to find an optimal ad selection and bid price determination strategy. In this document, two major steps are taken to tackle it. First, the augmented GAP(Generalized Assignment Problem) is proposed and a general bidding strategy is correspondingly provided. Second, we show that DSP problem is a special case of the augmented GAP and the general bidding strategy applies. To the best of our knowledge, our solution is the first DSP bidding framework that is derived from strict second price auction assumption and is generally applicable to the multiple ads scenario with various objectives and constraints. Our strategy is verified through simulation and outperforms state-of-the-art strategies in real application.
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