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As a revolutionary auction mechanism for display advertising, real-time bidding (RTB) allows advertisers to purchase individual ad impressions through real-time auctions. In RTB, the demand-side platform (DSP) acts as advertisers' bidding agent and aims at developing appropriate bidding strategies to maximize their specific key performance indicators (KPIs). Existing bidding strategies perform well for optimizing profits when the ad budget severely limited. However, when there is sufficient budget, their performance deteriorates. This results in added complexity for advertisers when applying these approaches in practice, hindering wider adoption. To address this challenging limitation, we propose the Adaptive ROI-Aware Bidding (ARAB) approach. It intelligently analyzes the budget setting and auction market conditions, and adjusts the bidding function accordingly to optimize profits. Different from previous studies that only bid based on the ad revenue, our proposed ROI-aware bidding function also takes into account the ad cost at impression-level. By doing so, ARAB dynamically allocates the budget on more cost-effective impressions to increase profits. Through extensive offline experiments on two real-world public datasets, we demonstrate that the proposed ARAB has achieved significant improvements in terms of both profit and ROI compared to state-of-the-art approaches.
Yang et al. (Fri,) studied this question.