System and method for optimizing online keyword auctions subject to budget and estimated query volume constraints

A computer-implemented method for scheduling online auctions, comprising:

• receiving a query having a keyword in a time period;
• determining a first slate of advertisements for the keyword in the time period from a plurality of slates of advertisements generated by a linear programming model;
• determining a second slate of advertisements for the keyword in the time period that maximizes revenue for a generalized second price auction using a parameterized discount factor for each bid based on a budget spent by an advertiser;
• choosing one of the first slate of advertisements and the second slate of advertisements by comparing revenue for each one of the slates of advertisements calculated using a parameterized discount factor for a bid based on a budget spent by an advertiser;
• and
• outputting the chosen slate of advertisements for display with the results of the query.

A computer system for scheduling online auctions, comprising:

• means for determining a first slate of advertisements for a keyword in a time period using a linear programming model;
• means for determining a second slate of advertisements for the keyword in the time period that maximizes revenue for a generalized second price auction using a parameterized discount factor for each bid based on a budget spent by an advertiser;
• means for choosing one of the first slate of advertisements and the second slate of advertisements by comparing revenue for each one of the slates of advertisements calculated using a parameterized discount factor for each bid based on a budget spent by an advertiser;
• and
• means for outputting the chosen slate of advertisements for display with the results of the query.