Waterfalling Mechanism for Ad Budget Allocation
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Solution Overview
Problem
Traditional online advertising budget pacing methods treat each bid equally, ignoring differences in financial potential, which results in suboptimal financial returns for advertisers.
Innovation Solution
Implementing a wrapper function to the budget factor that dynamically adjusts bid rankings based on the current budget factor and ad flow type, allowing for preferential allocation of budget to higher financial potential ads.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If traditional budget pacing methods treat each bid equally, then the budget allocation process is simple and easy to implement, but the financial returns are suboptimal
Solution Approach 1:
The patent applies parameter changes by modifying the budget factor calculation to incorporate bid quality metrics. Instead of using a uniform budget factor for all bids, the system dynamically adjusts the budget factor based on the estimated financial potential of each bid, thereby transforming the budget allocation from a simple equal-treatment approach to a differentiated approach that maximizes financial returns.
Solution Approach 2:
The patent implements local quality by applying different budget factor adjustments to different bids based on their individual characteristics. Each bid receives a customized budget factor modification based on its estimated quality and financial potential, rather than applying a single uniform rule to all bids. This allows the system to optimize budget allocation locally for each bid while maintaining overall budget control.
2Productivity
If uniform budget factor is applied to all bids, then the implementation is straightforward, but the financial potential differences between bids are ignored
Solution Approach 1:
The system changes the budget factor parameter from a uniform value to a dynamic value that varies by bid quality. The budget factor is modified based on the estimated financial potential of each bid, allowing high-potential bids to receive more favorable budget treatment while maintaining simplicity in the overall implementation through automated calculations.
Solution Approach 2:
The patent incorporates feedback mechanisms by using the estimated financial potential of bids to adjust budget factor assignments. The system evaluates bid quality metrics, feeds this information back into the budget factor calculation, and uses the adjusted budget factor to influence bid selection decisions, creating a closed-loop system that continuously optimizes for financial returns.
3Productivity
If dynamic wrapper function is used to adjust budget factor, then financial returns are maximized, but the computational complexity increases
Solution Approach 1:
The patent employs parameter changes through the wrapper function that dynamically adjusts the budget factor based on bid characteristics. The wrapper function takes the original budget factor and modifies it according to the estimated financial potential of each bid, enabling efficient budget allocation that adapts to real-time bid quality assessments without requiring complex computational models.
Solution Approach 2:
The wrapper function acts as an intermediary between the original budget factor and the final bid evaluation score. It mediates the relationship by transforming the budget factor into a quality-adjusted version that can be seamlessly integrated into existing bid ranking mechanisms, thereby improving ad campaign efficiency without requiring fundamental changes to the underlying computational infrastructure.
Data Source
AI summary
The present teaching relates to method, system, medium, and implementations for online advertising. Bids are solicited from multiple bidders for an online ad display opportunity. A current value of a budget factor is retrieved and used for computing, for each advertisement corresponding to a respective bid, a wrapper function value based on the current value of the budget factor and a flow type of the advertisement. Based on the wrapper function value for each advertisement, a ranking score is determined and used to rank the advertisements associated with the bids. A winning bid is accordingly selected based on the ranking scores.