On the ranking strategy in adword auctions
Résumé
Search engines get revenue thanks to adword auc- tions, where commercial links are proposed and charged to advertisers as soon as the link is clicked through. Most search engines have chosen (or switched to) a revenue-based ranking and charging scheme instead of a bid-based one. We investigate here the relevance of that scheme when advertisers valuation comes from a random distribution. We show that, depending on the search engines click-through-rate, revenue-based does not always outperform bid-based in terms of revenue to the search engine. As a result, some search engines may have an interest to move to revenue-based ranking while others do not.
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