Is pay-per-click efficient?: an empirical analysis of click values

Authors:
Dakan Wang;Gang Wang;Pinyan Lu;Yajun Wang;Zheng Chen;Botao Hu
Affiliations:
Stanford University, Stanford, CA, USA;Microsoft Research Asia, Beijing, China;Microsoft Research Asia, Beijing, China;Microsoft Research Asia, Beijing, China;Microsoft Research Asia, Beijing, China;Tsinghua University, Beijing, China
Venue:
Proceedings of the 20th international conference companion on World wide web
Year:
2011

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Abstract

Current sponsored search auction adopts per-click bidding. It implicitly assumes that an advertiser treats all clicks to be equally valuable. This is not always true in real world situations. Clicks which lead to conversions are definitely more valuable than those fraudulent clicks. In this work, we use post-ad-click behavior to measure a click's value and empirically show that for an advertiser, values of different clicks are highly variant. Thus for many clicks, the advertiser's single bid does not reflect his true valuations. This indicates that the sponsored search system under PPC mechanism is not efficient, or does not always give a slot to the advertiser who needs it most.