Abstract

This paper introduces an optimization system for search engine marketing. The system involves two major deciding factors in search engine marketing, i.e., a keyword configuration and a bidding strategy, with a goal of maximizing various performance indicators such as the number of impressions, clicks, and conversions. To this end, we first present a keyword efficiency analysis model based on the data envelopment analysis. The model draws relative keyword efficiencies for target performance indicators, and it provides a keyword configuration guide to advertisers. Second, we present a multi-objective binary programming model to find an efficient keyword bidding strategy under multiple target performance indicators and a budget. Also, an iterative solution approach is developed to consider its multi-objective and non-linear nature. The developed system is applied to real-world operations, and it is shown that our system provides significant benefits in operational efficiency.

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