Featured Research

from universities, journals, and other organizations

Google's Thriving Advertising Model Has Math Roots

Date:
June 8, 2005
Source:
Georgia Institute Of Technology
Summary:
This year, predicts Advertising Age, the combined advertising revenues of Google and Yahoo! will rival the combined prime-time ad revenues of America's three big television networks, ABC, CBS and NBC. Now, researchers at the Georgia Institute of Technology and the University of California, Berkeley have discovered a computer algorithm that could further increase profits for search engine advertising.

Atlanta (May 23, 2005) -- A 30-second prime-time television spot was once considered to be the most effective form of advertising, but search engine ads are replacing it. This year, predicts Advertising Age, the combined advertising revenues of Google and Yahoo! will rival the combined prime-time ad revenues of America's three big television networks, ABC, CBS and NBC. Now, researchers at the Georgia Institute of Technology and the University of California, Berkeley have discovered a computer algorithm that could further increase profits for search engine advertising.

Related Articles


"Our algorithm balances two trade-offs in a way that optimizes revenue in Google's advertising model," says Vijay Vazirani, professor in the College of Computing at Georgia Tech.

When Internet users perform a search on Google or Yahoo!, a separate list of advertising links appears to the right of each page of search results. Advertisers place bids for their ad links to appear with certain keywords, and the ads are ranked roughly in order of the amounts of the bids. (Search engines also take into account the popularity of the ad or "clickthrough rate.") An advertiser pays only when someone chooses to click on the ad link. On Google, advertisers can also specify a maximum daily budget for their ads. Once the budgeted amount is spent, an ad is dropped for the rest of the day.

Upon examining the Google ad model, Vijay Vazirani, together with his two Georgia Tech Ph.D. students, Aranyak Mehta and Amin Saberi, and Umesh Vazirani, a professor of computer science at Berkeley, realized that always giving the top spot to the highest bidder is not the best strategy for Google. The top bidders might rapidly exhaust their budgets and get dropped from the auction, thus reducing the competition for that keyword.

Google's profits will be higher, the researchers reasoned, if it somehow weighs both bids and remaining budget when ranking ads. They found a mathematical formula that finds the optimal trade-off between bids and remaining budget, maximizing what the advertisers are spending.

The research team has filed a provisional patent for their work to ensure that the research remains in the public domain. The team continues to explore other applications for their algorithm such as in engineering and for solving other computer science problems.


Story Source:

The above story is based on materials provided by Georgia Institute Of Technology. Note: Materials may be edited for content and length.


Cite This Page:

Georgia Institute Of Technology. "Google's Thriving Advertising Model Has Math Roots." ScienceDaily. ScienceDaily, 8 June 2005. <www.sciencedaily.com/releases/2005/06/050608060848.htm>.
Georgia Institute Of Technology. (2005, June 8). Google's Thriving Advertising Model Has Math Roots. ScienceDaily. Retrieved November 27, 2014 from www.sciencedaily.com/releases/2005/06/050608060848.htm
Georgia Institute Of Technology. "Google's Thriving Advertising Model Has Math Roots." ScienceDaily. www.sciencedaily.com/releases/2005/06/050608060848.htm (accessed November 27, 2014).

Share This


More From ScienceDaily



More Computers & Math News

Thursday, November 27, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

EU Pushes Google For Worldwide Right To Be Forgotten

EU Pushes Google For Worldwide Right To Be Forgotten

Newsy (Nov. 27, 2014) Privacy regulators recommend Google expand its requested removals to apply to all its web domains. Video provided by Newsy
Powered by NewsLook.com
Predictions Of Tablets' Demise Sound Familiar

Predictions Of Tablets' Demise Sound Familiar

Newsy (Nov. 26, 2014) The tablet's days are numbered, at least according to a recent IDC report. The market-research firm paints a grim outlook for tablets. Video provided by Newsy
Powered by NewsLook.com
Today's Prostheses Are More Capable Than Ever

Today's Prostheses Are More Capable Than Ever

Newsy (Nov. 26, 2014) Advances in prosthetics are making replacement body parts stronger and more lifelike than they’ve ever been. Video provided by Newsy
Powered by NewsLook.com
FCC Forces T-Mobile To Alert Customers Of Data Throttling

FCC Forces T-Mobile To Alert Customers Of Data Throttling

Newsy (Nov. 25, 2014) T-Mobile and the FCC have reached an agreement requiring the company to alert customers when it throttles their data speeds. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Space & Time

Matter & Energy

Computers & Math

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins