Online advertising plays a pivotal role in sustaining the accessibility of free content on the Internet, serving as a primary revenue source for websites and online services. This dynamic marketplace sees advertisers allocating budgets and competing for the opportunity to present ads to users engaging with web pages, online services, and mobile apps. Modern online advertising often employs first-price auctions to determine ad placements. Yet, conducting auctions as isolated events in a greedy manner, may lead to sub-optimal results, necessitating some form of budget pacing. Traditionally, budget pacing has been achieved through hard throttling, where ads or campaigns are selectively made eligible for each auction using a biased coin-toss with a specified probability (or pacing-signal). More recently, the pacing signal has been leveraged to soft throttle ads, and is used as a multiplicative factor on their bids, thus enabling participation in all auctions but with potentially modified bids.
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Stram et al. (2024) studied this question.
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