Determining bid amounts for presenting sponsored content to a user based on a likelihood of the user performing a conversion associated with the sponsored content

A computer program product comprising a computer-readable storage medium having instructions encoded thereon that, when executed by a processor, cause the processor to:

• receive, at an online system, an advertisement request (“ad request”) including an advertisement for presentation to one or more users of the online system, a maximum amount of compensation provided to the online system for presenting the advertisement, a budget for presenting the ad request over a duration, and a tracking mechanism configured to identify an action performed by online system users presented with the advertisement;
• identify an opportunity to present one or more advertisements to a user of the online system;
• identify the ad request as eligible for presentation to the user;
• determine a likelihood of the user performing the action identified by the tracking mechanism included in the advertisement based on information associated with the user by the online system;
• determine an average likelihood of users performing the action identified by the tracking mechanism included in the advertisement based on information associated with additional users by the online system;
• generate a subsidy value based on a comparison of the likelihood of the user performing the action identified by the tracking mechanism included in the advertisement to the average likelihood of users performing the action identified by the tracking mechanism included in the advertisement;
• generate a penalty value based on a number of the action identified by the tracking mechanism included in the advertisement previously identified during the duration, wherein the subsidy value includes a pacing factor determined so a combination of penalty values generated for multiple opportunities to present advertisements to users of the online system equals a combination of subsidy values generated for multiple opportunities to present advertisements to users of the online system;
• determine a bid amount associated with the ad request based on the budget included in the ad request;
• modify the bid amount associated with the ad request based on the subsidy value and the penalty value;
• and
• include the ad request and the modified bid amount associated with the ad request in one or more selection processes selecting content for presentation to the user.

A method comprising:

• receiving, at an online system, an advertisement request (“ad request”) including an advertisement for presentation to one or more users of the online system, a maximum amount of compensation provided to the online system for presenting the advertisement, a budget for presenting the ad request over a duration, and a tracking mechanism configured to identify an action performed by online system users presented with the advertisement;
• identifying an opportunity to present one or more advertisements to a user of the online system;
• identifying the ad request as eligible for presentation to the user;
• determining a likelihood of the user performing the action identified by the tracking mechanism included in the advertisement based on information associated with the user by the online system;
• determining an average likelihood of users performing the action identified by the tracking mechanism included in the advertisement based on information associated with additional users by the online system;
• generating a subsidy value based on a comparison of the likelihood of the user performing the action identified by the tracking mechanism included in the advertisement to the average likelihood of users performing the action identified by the tracking mechanism included in the advertisement;
• generating a penalty value based on a number of the action identified by the tracking mechanism included in the advertisement previously identified during the duration, wherein the penalty value is a minimum of a specified maximum for the penalty value and a constant decreased by a value inversely proportional to a square root of a number of times the action identified by the tracking mechanism included in the advertisement has been previously identified during the duration;
• determining a bid amount associated with the ad request based on the budget included in the ad request;
• modifying the bid amount associated with the ad request based on the subsidy value and the penalty value;
• and
• including the ad request and the modified bid amount associated with the ad request in one or more selection processes selecting content for presentation to the user.