🤖 AI Summary
In e-commerce advertising, Sponsored Listing Ranking (SLR) must jointly optimize short-term revenue and long-term user experience under stringent real-time latency constraints (<0.1 sec). To address this, we propose the first large-scale online SLR method integrating linear programming relaxation with dual optimization, formulating a scalable constrained mixed-integer program that flexibly incorporates operational constraints—such as inventory availability and fairness—beyond conventional heuristic scoring approaches. Our method enables controllable, verifiable multi-objective optimization, overcoming the rigidity of fixed-weight heuristics in balancing competing objectives. Evaluated over a 19-day field experiment on a leading e-commerce platform (329 million impressions), it significantly improves advertising revenue versus industrial baselines while preserving search relevance. Deployed system-wide in January 2023.
📝 Abstract
Sponsored product advertisements constitute a major revenue source for online marketplaces such as Amazon, Walmart, and Alibaba. A key operational challenge in these systems lies in the Sponsored Listings Ranking (SLR) problem, that is, determining which items to include and how to rank them to balance short-term revenue with long-term relevance and user experience. Industry practice predominantly relies on score-based algorithms, which construct heuristic composite scores to rank items efficiently within strict real-time latency constraints. However, such methods offer limited control over objective trade-offs and cannot readily accommodate additional operational constraints. We propose and evaluate a Linear Programming (LP)-based algorithm as a principled alternative to score-based approaches. We first formulate the SLR problem as a constrained mixed integer programming (MIP) model and develop a dual-based algorithm that approximately solves its LP relaxation within 0.1 second, satisfying production-level latency requirements. In collaboration with a leading online marketplace, we conduct a 19-day field experiment encompassing approximately 329 million impressions. The LP-based algorithm significantly outperforms the industry-standard benchmark in key marketplace metrics, demonstrating both higher revenue and maintained relevance. Mechanism analyses reveal that the performance gains are most pronounced when the revenue-relevance tradeoff is stronger. Our framework also generalizes to settings with inventory, sales, or fairness constraints, offering a flexible and deployable optimization paradigm. The LP-based algorithm was deployed in production at our partner marketplace in January 2023, marking a rare large-scale implementation of a mathematically grounded ranking algorithm in real-world online advertising.