Dealing with interdependencies and uncertainty in multi-channel advertising campaigns optimization

Abstract

In 2017, Internet ad spending reached 209 billion USD worldwide, while, e.g., TV ads brought in 178 billion USD. An Internet advertising campaign includes up to thousands of sub-campaigns on multiple channels, e.g., search, social, display, whose parameters (bid and daily budget) need to be optimized every day, subject to a (cumulative) budget constraint. Such a process is often unaffordable for humans and its automation is crucial. As also shown by marketing funnel models, the sub-campaigns are usually interdependent, e.g., display ads induce awareness, increasing the number of impressions-and, thus, also the number of conversions-of search ads. This interdependence is widely exploited by humans in the optimization process, whereas, to the best of our knowledge, no algorithm takes it into account. In this paper, we provide the first model capturing the sub-campaigns interdependence. We also provide the IDIL algorithm, which, employing Granger Causality and Gaussian Processes, learns from past data, and returns an optimal stationary bid/daily budget allocation. We prove theoretical guarantees on the loss of IDIL w.r.t. the clairvoyant solution, and we show empirical evidence of its superiority in both realistic and real-world settings when compared with existing approaches.