revenue mechanism for federated search engines
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Designing a Revenue Mechanismfor Federated Search Engines
Laura Bonetti, Sofia Ceppi, Nicola GattiPolitecnico di Milano
Presenter: Marco Brambilla [email protected] marcobrambi marcobrambi
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Outline
• Aim • Existing revenue mechanisms– Business models + microeconomic models
• A revenue mechanisms for FSE– Motivation– Model definition– Requirements– Properties
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Federated Search Engines
Search paradigmthat integrates search results
from heterogeneousdomain-specific
content providers
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The Problem
Designing a suitablerevenue mechanism
• Business model– who pays and when
• Microeconomic model– how the optimal payment can be computed
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Actors• User• Advertiser• Content service provider
• Advertising service provider• Integrated content and advertising service
provider
• Content integrator
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Payment Scheme• Pay-per-query– User / integrator pays for content
• Pay-per-impression– Advertiser pays for each impression
• Pay-per-click– Advertiser pays for user clicks
• Pay-per-conversion– User / advertiser pays when a transaction is made
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Microeconomic Models• Pricing models– Define the best price at which a service can be sold– Capture static situations– The optimization problem is solved offline
• Auction models– Define how some resources are allocated and how much
players have to pay– Capture dynamic situations– The optimization problem is solved online
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Auction Model for Advertising
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Auction Model for Advertising
Advertisers
Possible Allocation
Bids that ad a can submit
Allocation Function
PaymentRule
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Auctions Characteristics• Efficient allocation– The allocation maximizes the cumulative expected
revenue• Pay-per-click payment scheme• Most known:– Generalized First Price– Generalized Second Price– Vickrey-Clarke-Groves (VCG)
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Business Model for Federated Search
TRANSPORTContent
service provider
ACTIVITYContent
service provider
RESTAURANTContent
service provider
HOTELAdvertising
service provider
RESTAURANTAdvertising
service providerRESTAURANT
Advertising service
provider
Q1 + Q2 + Q3 + Q4 + Q5 + Q6 + Q7
QUERY
Q1: date of arrivalQ2: date of departureQ3: transfer user prefersQ4: departure cityQ5: activity to doQ6: preferred activity date Q7: arrival city
Content
Advertising
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Business Model Requirements• Heterogeneity– Integration of different business models
• Redistribution– Every actor must receives an appropriate monetary
incentive• Flexibility– According to the specific online search application
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Business Model Design (1)• Multiple business models:– FSE uses a content service provider to have access to
data pay-per-query
– FSE uses an advertising service provider pay per click or pay-per-conversion
– FSE uses an integrated content and advertising service provider pay per click or pay-per-conversion
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Business Model Design (2)• Redistribution:– Payment redistributed among all the involved actors– The appropriate monetary incentive is defined by
means of constraints in the microeconomic model• Flexibility:– We allow the change of the actors and their
interactions (see microeconomic model)
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Microeconomic Model for FSE
• For the FSE we need a novel microeconomic model– to capture the integration of advertisement– to find the appropriate redistribution
• This model must determine:– the optimal payments between the FSE and all the
advertising service providers
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Microeconomic Model Definition• Auction model with redistribution scheme• The bidders submit the qualities of the ads in
addition to the values– The FSE need to have all the information about the
ads to be in the position to target at best the ads for the user extracting the maximum revenue from the advertisement
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Microeconomic Model Requirements (1)• Individual rationality– Each actor expects a non-negative utility
• Weak budget balance– The FSE’s revenue expected must be non-negative
• Incentive compatibility– No actor gains more by misreporting its true
valuation
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• Allocative efficiency– The allocation maximizes the cumulative expected
revenue• Redistribution– The revenue must be shared over the actors without
violating the requirements• Flexibility– The model must work with potentially different
constraints due to different contracts
Microeconomic Model Requirements (1)
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Microeconomic Model Design• The model is an extension of the VCG
mechanism– REDISTRIBUTION
• Two computational phases:– Phase 1: list of ads to display and payment without
redistribution– Phase 2: redistribution
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Microecon. Model Design – Phase 1• The social choice function:
• VCG payments:
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Microecon. Model Design – Phase 2• Case 1: The FSE is a private entity – Minimum redistribution
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MM: Model Design – Phase 2• Case 1: The FSE is a private entity – Minimum redistribution
• Case 2: The FSE is a no-profit entity
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MM: Model Design – Phase 2• Case 1: The FSE is a private entity – Minimum redistribution
• Case 2: The FSE is a no-profit entityPriority over the actors Contract
A possible report of service provider s
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MM: Properties• Pay-per-impression• Undominated redistribution scheme– It is not possible redistribute more revenue without
violating the incentive compatibility property– Average percentage of the redistributed revenue:
Experiments on Webscope A3 Yahoo! Dataset = 70%• Impossibility of total redistribution– It is not possible to redistribute all the revenue to
the service providers
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Conclusion• FSE requires a new revenue mechanism• Heterogeneous and flexible revenue mechanism
for FSE that:– Satisfies some desirable properties– Allows for redistribution of FSE’s surplus
• Future work– Complete evaluation – Merging of ads belonging to different lists – Relations between organic and advertized links for
FSE
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Designing a Revenue Mechanism for Federated Search Engines
Laura Bonetti, Sofia Ceppi, Nicola GattiPolitecnico di Milano
Questions?