Budget Constrained Bidding by Model-free Reinforcement Learning in Display Advertising
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Real-time bidding (RTB) is almost the most important mechanism in online display advertising, where proper bid for each page view plays a vital and essential role for good marketing results. Budget constrained bidding is a typical scenario in RTB mechanism where the advertisers hope to maximize total value of winning impressions under a pre-set budget constraint. However, the optimal strategy is hard to be derived due to complexity and volatility of the auction environment. To address the challenges, in this paper, we formulate budget constrained bidding as a Markov Decision Process. Quite different from prior model-based work, we propose a novel framework based on model-free reinforcement learning which sequentially regulates the bidding parameter rather than directly producing bid. Along this line, we further innovate a reward function which deploys a deep neural network to learn appropriate reward and thus leads the agent to deliver the optimal policy effectively; we also design an adaptive ϵ-greedy strategy which adjusts the exploration behaviour dynamically and further improves the performance. Experimental results on real dataset demonstrate the effectiveness of our framework.
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