Bid optimization in search engine marketing

Abstract

Methods and apparatus are described for optimally allocating an online advertising budget for a search engine marketing (SEM) campaign among a fixed set of keywords.

1 . (canceled) 
     
     
         2 . A computer-implemented method of allocating an advertising budget among a set of keywords, each keyword having a bid, a bid intensity, and a utility associated therewith, the method comprising:
 selecting ones of the set of keywords based, at least in part, upon the utilities of the keywords;   raising the bid intensities associated with the selected ones of the set of keywords such that the advertising budget is not exceeded; and   raising the bids associated with first ones of the selected keywords based, at least in part, upon whether the bid intensities associated with the selected keywords reach maximum values.   
     
     
         3 . The computer-implemented method of  claim 2 , wherein raising the bids associated with the first ones of the selected keywords is performed such that the advertising budget is not exceeded. 
     
     
         4 . The computer-implemented method of  claim 2 , further comprising:
 reducing the intensities of second ones of the set of keywords in conjunction with raising the bids associated with the first selected keywords to ensure that the advertising budget is not exceeded.   
     
     
         5 . The computer-implemented method of  claim 2 , further comprising:
 reducing the bids associated with one or more of the first ones of the selected keywords based, at least in part, upon whether raising the bids associated with the first ones of the selected keywords resulted in an increase in revenue.   
     
     
         6 . The computer-implemented method of  claim 2 , wherein selecting ones of the set of keywords comprises selecting keywords having the highest utilities among the set of keywords. 
     
     
         7 . The computer-implemented method of  claim 2 , further comprising:
 ranking the set of keywords according to the associated utilities;   wherein selecting ones of the set of keywords includes selecting keywords from the set of keywords based, at least in part, upon the ranking.   
     
     
         8 . The computer-implemented method of  claim 2 , further comprising:
 ranking the selected keywords according to the associated utilities; and   identifying the first ones of the selected keywords based, at least in part, upon the ranking.   
     
     
         9 . The computer-implemented method of  claim 2 , wherein raising the bids associated with the first selected keywords comprises raising the bids associated with the first selected keywords until the utilities associated with the first selected keywords are substantially in equilibrium. 
     
     
         10 . The computer-implemented method of  claim 2 , further comprising
 generating a budget allocation based, at least in part, upon statistics derived from raising the bids and bid intensities.   
     
     
         11 . The computer-implemented method of  claim 10 , further comprising:
 communicating the budget allocation to an entity acting on behalf of an advertiser.   
     
     
         12 . The computer-implemented method of  claim 2 , wherein the utility of each keyword is derived based, at least in part, upon a corresponding conversion rate and the associated bid. 
     
     
         13 . A system for allocating an advertising budget among a set of keywords, each keyword having a bid, a bid intensity, and a utility associated therewith, the system comprising a processor and non-transient memory with program logic for execution on the processor, the program logic comprising:
 a keyword selection module configured to select ones of the set of keywords based, at least in part, upon the utilities of the keywords;   an intensity raising module configured to raise the bid intensities associated with the selected ones of the set of keywords such that the advertising budget is not exceeded; and   a bid raising module configured to raise the bids associated with first ones of the selected keywords based, at least in part, upon whether the bid intensities associated with the selected keywords reach maximum values.   
     
     
         14 . The system of  claim 13 , the program logic further comprising:
 an intensity reduction module configured to reduce the intensities of second ones of the set of keywords in conjunction with raising the bids associated with the first selected keywords to ensure that the advertising budget is not exceeded.   
     
     
         15 . The system of  claim 13 , the program logic further comprising:
 a bid reduction module configured to reduce the bids associated with one or more of the first ones of the selected keywords based, at least in part, upon whether raising the bids associated with the first ones of the selected keywords resulted in an increase in revenue.   
     
     
         16 . The system of  claim 13 , the program logic further comprising:
 a budget generation module configured to generate a budget allocation based, at least in part, upon statistics derived from raising the bids and bid intensities.   
     
     
         17 . The system of  claim 13 , wherein the utility of each keyword is derived based, at least in part, upon a corresponding conversion rate and the associated bid. 
     
     
         18 . A system for allocating an advertising budget among a set of keywords, each keyword having a bid, a bid intensity, and a utility associated therewith, the system comprising:
 means for selecting ones of the set of keywords based, at least in part, upon the utilities of the keywords;   means for raising the bid intensities associated with the selected ones of the set of keywords such that the advertising budget is not exceeded; and   means for raising the bids associated with first ones of the selected keywords based, at least in part, upon whether the bid intensities associated with the selected keywords reach maximum values.   
     
     
         19 . The system of  claim 18 , further comprising:
 means for reducing the intensities of second ones of the set of keywords in conjunction with raising the bids associated with the first selected keywords to ensure that the advertising budget is not exceeded.   
     
     
         20 . The system of  claim 18 , further comprising:
 means for reducing the bids associated with one or more of the first ones of the selected keywords based, at least in part, upon whether raising the bids associated with the first ones of the selected keywords resulted in an increase in revenue.   
     
     
         21 . The system of  claim 18 , wherein the utility of each keyword is derived based, at least in part, upon a corresponding conversion rate and the associated bid.