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Automatic flight management in an online marketplace

  • US 7,499,874 B2
  • Filed: 12/23/2005
  • Issued: 03/03/2009
  • Est. Priority Date: 05/28/1999
  • Status: Expired due to Fees
First Claim
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1. A method for automating management in an online marketplace among a plurality of advertisers and searchers, the method comprising:

  • maintaining a computer network-accessible database of advertiser search listings, each search listing including at least a bid amount and a search term associated therewith, the bid amount corresponding to economic value given by the associated advertiser to an operator of the online marketplace when network locations of the associated advertiser are referred to a searcher in response to a database query from the searcher;

    initializing an automated advertising flight of an advertiser that owns a plurality of search listings by determining a remaining budget and a remaining flight period; and

    iteratively and periodically performed by a computer, for each search term (Ti) and rank (j), the following to execute the advertising flight while a time period runs or until an occurrence of a specified eventautomatically updating a plurality of flight parameters based on a current state of the marketplace and any updates from the advertiser, wherein the flight parameters are selected from the group consisting of a conversion rate, the bid amount and a corresponding rank, a maximum average cost per click (CPC), and a historical number of clicks for each search term;

    maximizing a total profit by iteratively and automatically adjusting the bid amounts associated with at least some of the plurality of search terms until an optimal combination of bid amounts and corresponding plurality of search terms is determined, wherein each iteration calculates an estimated total number of clicks, the bid amounts, a total cost, and a total profit for the advertising flight for comparison with previous iterations;

    computing Rmax, a highest conversion rate of conversion rates R(Ti, j), of each search term Ti in a set {T1, T2, . . . , Tk} at any rank j;

    normalizing the number of clicks and the bid amount of each search term at every rank so that all search terms at all ranks have the same conversion rate Rmax;

    assigning a conversion rate (Ti, j)=Rmax at every rank j;

    setting a number of variable clicks for the current search term and rank equal to the ratio of the conversion rate for the current term and rank to Rmax multiplied by the total number of clicks for the current search term, rank, and the current remaining length of the flight;

    setting the current bid for the search term T at rank j as equal to the ratio of Rmax to the current conversion rate for the search term T at rank j multiplied by the current bid for the search term T at the current rank j;

    re-computing the remaining budget based on a budget amount spent during a current iteration; and

    re-computing the remaining flight period based on a flight period expired during the current iteration.

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