Research On Budget Allocation Strategy Of Keyword Advertising Across Search Engines

Keyword advertising has become the major Network Marketing. Currently, thepopular search engine is mainly Baidu, Google, Sogou, Soso in China. Differentsearch engines have different users, they are concerned about different items withdifferent degree, the degree of concern of advertising is different too. And the searchengine auction mechanism, the average price of per click of keyword advertising isalso different. If advertisers want to get the higher returns on search engine, theyneed to advertise across multiple search engines.By using optimal control theory, we regards the whole bidding process ofadvertisers as a system, select the percentage of the allocated budgetin general budget as controlled variable, and build models for budget allocations ofkeyword advertising across search engine. According to the differences of keywordadvertising mechanism which is used in the existing search engine, it can be dividedinto three cases to build models, which include cross Generalized Second-Pricemechanism, cross Quality-based Generalized Second-Price mechanism and corssGeneralized Second-Price and Quality-based Generalized Second-Price mechanism,and find their optimum solutions.We found that at a certain time span, given a search engine market, the budgetallocation trend of a search engine in advertising across multiple search engines isthe same as the single search engine. When they advertise across multiple searchengines who have the same mechanism, when the budget is sufficient, generally,advertisers should put a larger proportion of the budget in the search engines withhigh competition, but when the budget is small, advertisers should put a largerproportion of the budget in the search engines with low competition. When weadvertise across multi-Quality-based Generalized Second-Price mechanism searchengine, if the budget is sufficient, we should put the large proportion of the budgetinto search engine which get a lower quality score and suffer a less influence thatclick rate on the quality score. Contrarily, we should put the large proportion of thebudget into search engine which get a higher quality score and suffer a moreinfluence that click rate on the quality score. When we advertise across GeneralizedSecond-Price and Quality-based Generalized Second-Price, although Quality-basedGeneralized Second-Price mechanism search engines have some advantages, it isnot necessarily put more budgets on it. Finally, we verified the budget allocationstrategy use simulation method.