[mercari GEARS 2025] Mercari Ads Optimizations for Profitable Revenue Stream

Transcript

1. Mercari Ads Optimizations for Profitable Revenue Stream 
 Kumar Abhinav
 Mercari / Senior Software Engineer

2. Kumar Abhinav
 
 
 • Joined Mercari in 2018 as New Grad
 • Graduate from IIT Kharagpur (India) 󰳐
 • Experience: Eng. Manager (EM) | Scrum Master
 • Domains: Ads | Image Search | TnS | Data Science
 • Hobbies: Futsal ⚽ | Snowboarding 🏂
 Senior Software Engineer

3. Ads Business Insights
 Release
 Projection

4. Optimization Goal: Revenue
 • New Optimization Goal: “eCPM” OR “Imps” ??
 ◦ Imps (impressions) are constrained by supply side so it’s difficult to optimize
 Terminology
 • eCPM (estimated Cost per Mile): Estimated Ads Revenue per 1000 imps
 
 Revenue
 
 eCPM 
 
 Imps

5. New Optimization Goal: eCPM
 
 eCPM
 
 
 
 pCTR
 BidPrice
 1000
 Terminology
 • eCPM (estimated Cost per Mile): Estimated Ads Revenue per 1000 imps
 • pCTR (predicted Click Through Rate): #clicks / #imps
 • Bid Price: Price advertiser is willing to pay per ad click (ads revenue per click)

6. Optimization Targets
 pCTR
 
 • Optimize pCTR Accuracy
 
 • Introduction of Calibration Model
 
 • Design Evaluation Metrics
 BidPrice
 
 • Optimize BidPrice Setting (TargetCPA)
 
 • Introduction of Auto Bidding (dynamic)
 
 • Design Accurate pCVR Model

7. Optimization Target 1.a: pCTR Design 
 1. Beta Calibration model (Probability Calibration)
 
 
 
 2. Evaluation Metrics
 a. NCE (Normalized Cross Entropy): Measures model's predictive gain over a simple baseline model (ideally NCE < 1)
 
 
 
 b. Reliability Diagram: Visualization of model's prediction alignment with the actual frequency of outcomes 
 

8. Optimization Target 1.b: pCTR Results 
 
 +45% eCPM
 +34% CVR

9. Optimization Target 2.a: BidPrice Design
 AutoBidding: TargetCPA based optimization
 
 
 
 
 
 Terminology
 • Target CPA (Cost Per Acquisition): Amount advertisers are willing to pay for one conversion
 • pCVR (predicted Conversion Rate): #conversions / #clicks
 
 
 BidPrice
 ∝ 
 Target
 CPA
 
 pCVR

10. Optimization Target 2.b: Bid Price Results
 
 
 70% Agencies achieved CPA lower than Target CPA from Auto Bidding 
 
 Lower “ActualCPA" is better

11. Thank You!
 Daii Akahoshi
 Hongli Zhao
 Hidenobu Shinozuka
 Juanjuan Ben
 Masatoshi Oka
 Tatsuya Yokoyama