Automated Bid Adjustments in Search Engine Advertising

Abstract: In digital advertising, major search engines allow advertisers to set bid adjustments on their ad campaigns in order to capture the valuation differences that are a function of query dimensions. In this thesis, a model that uses bid adjustments is developed in order to increase the number of conversions and decrease the cost per conversion. A statistical model is used to select campaigns and dimensions that need bid adjustments along with several techniques to determine their values since they can be between -90% and 900%. In addition, an evaluation procedure is developed that uses campaign historical data in order to evaluate the calculation methods as well as to validate different approaches. We study the problem of interactions between different adjustments and a solution is formulated. Real-time experiments showed that our bid adjustments model improved the performance of online advertising campaigns with statistical significance. It increased the number of conversions by 9%, and decreased the cost per conversion by 10%.