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In ecommerce platform, users will be less likely to use organic search ifsponsored search shows them unexpected advertising items, which will be ahidden cost for the platform. In order to incorporate the hidden cost intoauction mechanism which helps create positive growth for the platform, we turnto a reserve price design to decide whether we sell the traffic, as well asbuild healthy relationships between revenue and user experience. We propose adynamic reserve price design framework to sell traffic more efficiently withminimal cost of user experience while keeping long term incentives to theadvertisers to reveal their valuations truthfully. A distributed algorithm isalso proposed to compute the reserve price with billion scale data in theproduction environment. Experiments with offline evaluations and online ABtesting demonstrate that it is a simple and efficient method to be suitablyused in industrial production. It has already been fully deployed in theproduction of Lazada sponsored search.

Dynamic Reserve Price Design for Lazada Sponsored Search