Online Joint Optimization of Sponsored Search Ad Bid Amounts and Product Prices on e-Commerce

Shoichiro Koguchi, Kazuhide Nakata, Ken Kobayashi, Kosuke Kawakami, Takenori Nakajima, Kevin Kratzer

2025

Abstract

With the rapid development of the e-commerce market, sellers are increasingly required to devise effective strategies to maximize sales and profits within limited resources. This paper insists that demand on e-commerce platforms can be partially controlled through advertising bid amounts. We examine the simultaneous control of demand and product pricing via advertising bids. Specifically, this study proposes a method for the joint optimization of advertising bid amounts and product prices to maximize sellers’ sales and profits. Previous research has often focused on either advertising bid amounts or product prices, with little consideration of their simultaneous optimization. In contrast, our study develops an optimization method that accounts for the interdependencies between advertising bid amounts, advertising budgets, product prices, and inventory control. This comprehensive approach enables sellers to optimize advertising bid amounts and product prices simultaneously by considering these interrelated factors. Moreover, the proposed method demonstrates high scalability and is well-suited to real-world e-commerce markets, allowing for adaptation to various market conditions. Simulation results indicate that the proposed method significantly enhances sales and profits compared to approaches that do not incorporate price variability.

Paper Citation

in Harvard Style

Koguchi S., Nakata K., Kobayashi K., Kawakami K., Nakajima T. and Kratzer K. (2025). Online Joint Optimization of Sponsored Search Ad Bid Amounts and Product Prices on e-Commerce. In Proceedings of the 14th International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES; ISBN 978-989-758-732-0, SciTePress, pages 67-78. DOI: 10.5220/0013118300003893

in Bibtex Style

@conference{icores25,
author={Shoichiro Koguchi and Kazuhide Nakata and Ken Kobayashi and Kosuke Kawakami and Takenori Nakajima and Kevin Kratzer},
title={Online Joint Optimization of Sponsored Search Ad Bid Amounts and Product Prices on e-Commerce},
booktitle={Proceedings of the 14th International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES},
year={2025},
pages={67-78},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0013118300003893},
isbn={978-989-758-732-0},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 14th International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES
TI - Online Joint Optimization of Sponsored Search Ad Bid Amounts and Product Prices on e-Commerce
SN - 978-989-758-732-0
AU - Koguchi S.
AU - Nakata K.
AU - Kobayashi K.
AU - Kawakami K.
AU - Nakajima T.
AU - Kratzer K.
PY - 2025
SP - 67
EP - 78
DO - 10.5220/0013118300003893
PB - SciTePress