arXiv Machine Learning By Greg Kocher, Sanjana Arun

Marginal Expected Revenue for Jointly Ranking Auction and Fixed-Price Listings in E-Commerce Sponsored Search

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The paper extends the Expected Cost-per-Mille (eCPM) framework to handle auction and hybrid "Auction with Buy It Now" (ABIN) listings by deriving a marginal eCPM (meCPM) that captures the incremental value of showing an additional impression for items whose prices evolve dynamically. This unified ranking objective allows fixed-price, auction, and ABIN listings to be compared and ranked together. A production implementation was tested via online A/B experiments on a large e-commerce platform, yielding positive revenue gains and statistically significant improvements in user metrics, leading to deployment in production.

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