Recommendation and advertising are two important businesses for many internet companies. Recommendation aims for DAU growth, or traffic growth, while advertising uses this traffic for monetization. Both problems are similar - each time traffic arrives, selecting top-k candidates from a large candidate set, both using the retrieval + ranking architecture, possibly with coarse ranking in between. Essentially, this is a trade-off between effectiveness and engineering.
If I had to identify the biggest technical difference between the two, I think it’s bidding. In advertising scenarios, the advertiser role is introduced, so besides user experience, we need to satisfy the advertisers’ needs (like volume, cost, etc.) to bring sustained revenue growth. Advertisers express their needs most directly through bidding, meaning how much they’re willing to pay per click/convert (truthful telling). This leads to the bidding research area. Many related papers are collected in rtb-papers.
This article mainly discusses Alibaba’s 2019 KDD paper Bid Optimization by Multivariable Control in Display Advertising. This paper solves two core bidding problems: bid formula and price adjustment strategy. From derivation of optimal bid formula to construction of bid controller, the paper’s overall modeling approach is worth learning. The entire derivation paradigm can be extended to more general bidding scenarios with strong practicality. I recommend reading the original paper.