Optimal bidding strategy for brand advertising

Abstract

Brand advertising is a type of advertising that aims at increasing the awareness of companies or products. This type of advertising is well studied in economic, marketing, and psychological literature; however, there are no studies in the area of computational advertising because the effect of such advertising is difficult to observe. In this study, we consider a real-time biding strategy for brand advertising. Here, our objective to maximizes the total number of users who remember the advertisement, averaged over the time. For this objective, we first introduce a new objective function that captures the cognitive psychological properties of memory retention, and can be optimized efficiently in the online setting (i.e., it is a monotone submodular function). Then, we propose an algorithm for the bid optimization problem with the proposed objective function under the second price mechanism by reducing the problem to the online knapsack constrained monotone submodular maximization problem. We evaluated the proposed objective function and the algorithm in a real-world data collected from our system and a questionnaire survey. We observed that our objective function is reasonable in real-world setting, and the proposed algorithm outperformed the baseline online algorithms.