Set Bids for Search Advertising from Business Value
WayfairApplied Scientist · Technical Screen
Last updated
Design search-ad bidding from expected business value, with budget pacing, delayed conversion feedback, auction assumptions, and incremental-profit evaluation.
Design a bidding approach for a retailer buying search advertisements. Explain how the business value of an ad opportunity becomes a bid, how the system respects a campaign budget, and how you would determine whether the approach helps the business.
Constraints & Assumptions
The reported case concerns search advertising and bidding/pricing. Auction rules, available features, attribution rules, and numerical budgets were not specified. State these assumptions before proposing a model or formula; do not assume that a submitted bid equals the final charge.
Clarifying Questions
- Is the objective incremental contribution profit, purchases, new customers, or revenue subject to a return target?
- Is the auction priced per click, per impression, or per conversion, and which decisions does the platform expose?
- What feedback delay, campaign budget, inventory availability, and geographic or time restrictions apply?
Follow-up questions
- How would you handle a new product with little history, a sudden conversion-rate change, or a campaign that spends its budget too early? How would organic purchases affect your interpretation of attributed revenue?
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