Bidding Agent Design in the LinkedIn Ad Marketplace

Paper

Yuan Gao, Kaiyu Yang, Yuanlong Chen, Min Liu and Noureddine El Karoui

We establish a general optimization framework for the design of automated bidding agent in dynamic online marketplaces. It opti- mizes solely for the buyer’s interest and is agnostic to the auction mechanism imposed by the seller. As a result, the framework al- lows, for instance, the joint optimization of a group of ads across multiple platforms each running its own auction format. Bidding strategy derived from this framework automatically guarantees the optimality of budget allocation across ad units and platforms. Common constraints such as budget delivery schedule, return on investments and guaranteed results, directly translates to additional parameters in the bidding formula. We share practical learnings of the deployed bidding system in the LinkedIn ad marketplace based on this framework.