2. Online Algorithms
• Classic model of algorithms
– We get to see the entire input, then compute some
function of it
– In this context, “offline algorithm”
• Online Algorithms
– We get to see the input one piece at a time, and need
to make irrevocable decisions along the way
– Similar to the data stream model
5. Example: Bipartite Matching
Perfect matching... all the vertices of graph are matched
Maximum Matching... a matching that contains the longest possible number of matches
6. Matching Algorithm
• Problem: Find a maximum matching for a
given bipartite graph
– A perfect one if it exists
• There is a polynomial – time offline algorithm
based on augmenting path (Hopcroft & Karp
1973)
7. Online Graph Matching Problem
• Initially, we are given the sets boys and girls
• In each round, one girl’s choice are revealed
– That is, girl’s edges are revealed
• At that time, we have to decide either:
– Pair the girl with a boy
– Do not pair the girl with any boy
• Example of application:
Assigning tasks to servers
16. Greedy Algorithm
• Greedy algorithm for the online graph
matching problem:
– Pair the new girl with any eligible boy
• If there is none, do not pair girl
• How good is the algorithm?
17. Competitive Ratio
• For input I, suppose greedy produces
matching 𝑴 𝒈𝒓𝒆𝒆𝒅𝒚 while an optimal matching
is 𝑴 𝒐𝒑𝒕
Competitive ratio=
𝒎𝒊𝒏 𝑎𝑙𝑙 𝑝𝑜𝑠𝑠𝑖𝑏𝑙𝑒 𝑖𝑛𝑝𝑢𝑡𝑠 𝐼(| 𝑴 𝒈𝒓𝒆𝒆𝒅𝒚|/ |𝑴 𝒐𝒑𝒕|)
18. Analyzing the Greedy Algorithm
• Suppose 𝑴 𝒈𝒓𝒆𝒆𝒅𝒚 ≠ 𝑴 𝒐𝒑𝒕
• Consider the set G of girls
matched 𝑴 𝒐𝒑𝒕 but not in 𝑴 𝒈𝒓𝒆𝒆𝒅𝒚
• (1) |𝑴 𝒐𝒑𝒕| ≤ |𝑴 𝒈𝒓𝒆𝒆𝒅𝒚|+|G|
• Every boy B adjacent to girls in G
is already matched in 𝑴 𝒈𝒓𝒆𝒆𝒅𝒚
• (2) |𝑴 𝒈𝒓𝒆𝒆𝒅𝒚|≥ |B|
• Optimal matches all the girls in G to boys in B
• (3) |G|≤|B|
20. History of Web Advertising
• Banner ads (1995-2001)
– Initial form of web advertising
– Popular websites charged X$
for every 1000 “impressions”
of the add
• Called “CPM” rate (cost per thousand impressions)
• Modeled similar to TV, magazine ads
– From untargeted to demographically targeted
– Low click-through rates
• Low ROI for advertisers
21. Performance-based Advertising
• Introduced by Overture around 2000
– Advertisers bid on search keywords
– When someone searches for that keyword, the
highest bidder’s ad is shown
– Advertiser is charged only if the ad is clicked on
• Similar model adopted by Google with some
changes around 2002
– Called Adwords
22. Algorithmic Challenges
• Performance – based advertising works
– Multi-billion-dollar industry
• What ads to show for a given query?
– The AdWords Problem Mining of Massive Datasets
• If I am an advertiser, which search terms should I
bid on and how much should I bid?
– (It’s not our focus)
23. AdWords Problem
• A stream of queries arrives at the search
engine: 𝑞1, 𝑞2, …
• Several advertisers bid on each query
• When query 𝑞𝑖 arrives, search engine must
pick a subset of advertisers whose ads are
shown
• Goal: Maximize search engine’s revenues
• Clearly we need an online algorithm!
27. Limitations of Simple Algorithm
• CTR of an ad is unknown
• Advertisers have limited budgets and bid on
multiple ads.
28. Future Work
• Estimation of CTR
• Algorithm to solve limited budgets problem
(Balance Algorithm)
29. Recall…
• Greedy algorithm for the online graph
matching problem
• Competitive Ratio
• History of Web Advertising
• Performance-based Advertising
• The AdWords Innovation
• Click Through Rate (CTR)
• Expected Revenue
30. AdWords Problem
Given:
• A set of bids by advertiser for search queries
• A click-through rate for each advertiser query
pair
• A budget for each advertiser
• A limit on the number of ads to be displayed
with each search query
31. Adwords Problem
Respond to each search query with a set of
advertisers such that:
• The size of set is no larger than the limit on
the number of ads per query
• Each advertiser has bid on search query
• Each advertiser has enough budget left to pay
for the ad if it is clicked upon
32. Dealing with Limited Budget
• Our setting: Simplified Environment
– There is 1 ad shown for each query
– All advertisers have same budget B
– All ads are equally likely to be clicked
– Value of each ad is same(=1)
• Simplest Algorithm is greedy
– For a query pick any advertiser who has bid 1 for
that query
– Competitive ratio of greedy is 1/2.
33. Bad Scenario for Greedy
• Two advertisers A and B
– A bids on x, B bids on x and y
– Both have budget $4
• Query stream: x x x x y y y y
– Worst case for greedy choice: B B B B _ _ _ _
– Optimal: A A A A B B B B
– Competitive ratio= ½
• This is worst case!
– Note: Greedy algorithm is deterministic – it always
resolves draw in same way
34. BALANCE Algorithm [MSVV]
• For each query, pick the advertiser with the
largest unspent budget
• Break ties arbitrarily ( but in deterministic way)
35. Example: BALANCE
• Two advertisers A and B
– A bids on x, B bids on x and y
– Both have budget $4
• Query stream: x x x x y y y y
• Balance Choice: A B A B B B _ _
– Optimal: A A A A B B B B
• Competitive ratio= ¾
– For BALANCE with two advertisers
36. Analyzing 2 advertiser BALANCE
• Consider simple case
– 2 Advertisers, 𝐴1 and 𝐴2, each with budget B(≥1)
– Optimal solution exhaust both advertisers’ budgets
• BALANCE must exhaust at least one advertiser’s
budget:
– If not, we can allocate more queries
– Assume BALANCE exhausts 𝐴2’s budget
39. BALANCE: General Result
• In the general case, worst case competitive
ratio of BALANCE is 1-1/e = approx. 0.63
– Interestingly, no online algorithm has a better
competitive ratio!
• Let’s see the worst case example that gives
this ratio
40. Worst case for BALANCE
• N advertisers 𝐴1, 𝐴2, … 𝐴 𝑁
– Each with budget B>N
• Queries:
– N.B queries appear in N rounds of B queries each
• Bidding:
– Round 1 queries: bidders 𝐴1, 𝐴2, … 𝐴 𝑁
– Round 2 queries: bidders 𝐴2, 𝐴3, … 𝐴 𝑁
– Round i queries: bidders 𝐴𝑖, … 𝐴 𝑁
44. BALANCE Allocation
After k rounds, the allocation to k advertiser is:
𝑆 𝑘 = 𝐵 (𝑁 − 𝑖 + 1)𝑘
𝑖=1
If we find smallest k such that 𝑆 𝑘 ≥ 𝐵, then after k rounds
we can not allocate any queries to any advertiser
46. BALANACE Analysis
• Fact for large n
– Result due to Euler
ln 𝑁 − 𝑘 = ln 𝑁 − 1
ln(𝑁/(𝑁 − 𝑘)) = 1
𝑁/(𝑁 − 𝑘) = 𝑒
𝒌 = 𝑵(𝟏 − 𝟏/𝒆)
47. BALANACE Analysis
• So after the first 𝑘 = 𝑁(1 − 1/𝑒) rounds, we
cannot allocate a query to any advertiser
• Revenue = 𝐵. 𝑁(1 − 1/𝑒)
• Competitive ratio = 1 − 1/𝑒
48. General Version of the Problem
• So far: all bid = 1, all budget equal (=B)
• In general balance can be terrible
– Consider query q, two advertiser 𝐴1and 𝐴2
– 𝐴1: bid = 1, budget = 110
– 𝐴2: bid = 10, budget = 100
– Suppose we see 10 instance of q
– BALANCE always selects 𝐴1and earns 10
– Optimal earns 100
49. Generalized BALANCE
• Consider query q, bidder i
– Bid = 𝑥𝑖
– Budget = 𝑏𝑖
– Amount spent so far = 𝑚𝑖
– Fraction of budget left over 𝑓𝑖 = 1 − 𝑚𝑖/𝑏𝑖
– Define 𝜑𝑖(𝑞) = 𝑥𝑖 1 − 𝑒−𝑓 𝑖
• Allocate query q to bidder i with largest value
of 𝜑𝑖 𝑞
• Same Competitive ratio = 1 − 1/𝑒
50. Conclusion
• AdWords Problem
• Limited Budget Problem
• Solution of Limited Budget Problem
– BALANCE Algorithm and Analysis
52. References
• [1] Mehta A, Saberi A, Vazirani U, Vazirani V.
Adwords and generalized online
matching. J ACM (JACM) 2007;54(5):22.
• [2] Reiss C, Wilkes J, Hellerstein JL. Google cluster-
usage traces: formatþ schema.
Google Inc., White Paper; 2011.
• [3] Legrain A, Fortin M-A, Lahrichi N, Rousseau L-
M. Online stochastic optimization of radiotherapy
patient scheduling. In: Health care management
science;
2014. p. 1–14
53. References
• [4] Coy P. The secret to google's success.
〈http://www.bloomberg.com/bw/stories/ 2006-03-05/
the-secret-to-googles-success〉;
5 March 2006 [accessed16.02.15].
• [5] Google, 2014. 2014 financial tables.
〈https://investor.google.com/financial/tables.html〉
[accessed 16.02.2015].
• [6] Antoine Legrain , Patrick Jaillet A stochastic
algorithm for online bipartite resource allocation
problems.
Computers & Operations Research 75 (2016) 28–37,