Modeling the Clickstream: Implications for Web-Based Advertising Efforts
Marketing Science
Improvements to the Linear Programming Based Scheduling of Web Advertisements
Electronic Commerce Research
Stochastic models for budget optimization in search-based advertising
WINE'07 Proceedings of the 3rd international conference on Internet and network economics
E-Marketplace Emergence: Evolution, Developments and Classification
Journal of Electronic Commerce in Organizations
Hi-index | 12.05 |
This paper presents an application of the Bayesian Markov Chain Monte Carlo (MCMC) used to select cost-effective ad spots in online marketplaces. Due to the rise of electronic commerce, the online advertising industry which is highly complex undergoes rapid changes. And there are plenty of studies that keep coming up with the similar methodologies to predict click-through rates for ad spots. Previous research has mainly considered the following models: a logistic regression model and a binomial model connected by a linear link function. However, it is problematic to directly apply the existing online advertising effect models to the click-through data of online marketplaces. Because generally a click-through rate is fairly low so that a small change in its rate might give a somewhat larger prediction error in terms of click-throughs. We propose a Bayesian Poisson-gamma model to predict click-throughs instead of their rates and further extend to incorporate random effects in order to account for heterogeneity of variance between keywords. Our results may help guide online advertisers in decision-making.