Bid Optimization for Internet Graphical Ad Auction Systems Via Special Ordered Sets
This paper describes an optimization model for setting bid levels for certain types of advertisements on web pages. This model is non-convex, but the authors are able to obtain optimal or near-optimal solutions rapidly using branch and cut open source software. The financial benefits obtained using the prototype system has been substantial. Advertising on the World Wide Web is ubiquitous and a big business. Recently a great deal of attention has been paid to \"Sponsored Search\", where text advertisements with hypertext links are placed next to the search results produced by search engines, and these do indeed account for a large fraction of the revenue generated by web advertising.