Targeted advertising with inventory management

Abstract

Companies that maintain web sites can make considerable revenue through advertising, and consequently attracting advertisers has become an important and competitive en- deavor. A property that can attract advertisers is high click- through rates; and therefore companies can benefit from de- livery systems that serve advertisements selectively to those visitors most likely to click. In order to satisfy contrac- tual obligations, however, these systems must simultane- ously perform inventory management. For example, if a company has agreed to serve a certain number of a partic- ular advertisement, it must do so regardless of how likely it is to be clicked. In this paper, we describe how to use a linear program to identify a schedule, based on known at- tributes of each visitor, that maximizes the expected number of clicks given all of the inventory-management constraints. We present experimental results using real data that demon- strate that a delivery schedule from our system realizes more clicks than a schedule that was hand constructed.