Han Cai

Real-Time Bidding by Reinforcement Learning in Display Advertising

The majority of online display ads are served through real-time bidding (RTB) --- each ad display impression is auctioned off in real-time when it is just being generated from a user visit. To place an ad automatically and optimally, it is critical for advertisers to devise a learning algorithm to cleverly bid an ad impression in real-time. Most previous works consider the bid decision as a static optimization problem of either treating the value of each impression independently or setting a bid price to each segment of ad volume. However, the bidding for a given ad campaign would repeatedly happen during its life span before the budget runs out. As such, each bid is strategically correlated by the constrained budget and the overall effectiveness of the campaign (e.g., the rewards from generated clicks), which is only observed after the campaign has completed. Thus, it is of great interest to devise an optimal bidding strategy sequentially so that the campaign budget can be dynamically allocated across all the available impressions on the basis of both the immediate and future rewards. In this paper, we formulate the bid decision process as a reinforcement learning problem, where the state space is represented by the auction information and the campaigns real-time parameters, while an action is the bid price to set. By modeling the state transition via auction competition, we build a Markov Decision Process framework for learning the optimal bidding policy to optimize the advertising performance in the dynamic real-time bidding environment. Furthermore, the scalability problem from the large real-world auction volume and campaign budget is well handled by state value approximation using neural networks. The empirical study on two large-scale real-world datasets and the live A/B testing on a commercial platform have demonstrated the superior performance and high efficiency compared to state-of-the-art methods.

Product-Based Neural Networks for User Response Prediction

Predicting user responses, such as clicks and conversions, is of great importance and has found its usage inmany Web applications including recommender systems, websearch and online advertising. The data in those applicationsis mostly categorical and contains multiple fields, a typicalrepresentation is to transform it into a high-dimensional sparsebinary feature representation via one-hot encoding. Facing withthe extreme sparsity, traditional models may limit their capacityof mining shallow patterns from the data, i.e. low-order featurecombinations. Deep models like deep neural networks, on theother hand, cannot be directly applied for the high-dimensionalinput because of the huge feature space. In this paper, we proposea Product-based Neural Networks (PNN) with an embeddinglayer to learn a distributed representation of the categorical data, a product layer to capture interactive patterns between interfieldcategories, and further fully connected layers to explorehigh-order feature interactions. Our experimental results on twolarge-scale real-world ad click datasets demonstrate that PNNsconsistently outperform the state-of-the-art models on various metrics.

Volume Ranking and Sequential Selection in Programmatic Display Advertising

Programmatic display advertising, which enables advertisers to make real-time decisions on individual ad display opportunities so as to achieve a precise audience marketing, has become a key technique for online advertising. However, the constrained budget setting still restricts unlimited ad impressions. As a result, a smart strategy for ad impression selection is necessary for the advertisers to maximize positive user responses such as clicks or conversions, under the constraints of both ad volume and campaign budget. In this paper, we borrow in the idea of top-N ranking and filtering techniques from information retrieval and propose an effective ad impression volume ranking method for each ad campaign, followed by a sequential selection strategy considering the remaining ad volume and budget, to smoothly deliver the volume filtering while maximizing campaign efficiency. The extensive experiments on two benchmarking datasets and a commercial ad platform demonstrate large performance superiority of our proposed solution over traditional methods, especially under tight budgets.