Iron: Keyword Grouping Model for Text Ads Bidding in Paid Search

Iron: Keyword Grouping Model for Text Ads Bidding in Paid Search: We present a keyword grouping model named Iron that helps determine keyword bidding prices for text ads auctions in Google paid search. In the grouping process, we first train a Gradient Boosting Machine to predict the conversion rate of every keyword based on eBay search log data, paid search performance and Google feedback for the keywords, then calculate the expected value of each keyword based on the predicted conversion rate and the price, and finally group keywords according to the expected value. After that, we set the bids of keywords based on group-level data. We demonstrate that the Iron model improves our incremental revenue greatly compared with the previous keyword grouping model, which groups keywords solely based on keyword category.

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