Marginal Expected Revenue for Jointly Ranking Auction and Fixed-Price Listings in E-Commerce Sponsored Search
TL;DR
This work extends the familiar fixed-price eCPM to auction dynamics, allowing unified ranking of fixed-price, auction, and ABIN listings under a single objective, and describes a practical production implementation that approximates this objective, addressing cold-start challenges by bootstrapping from existing engagement models.
Abstract
E-commerce search ranking must balance multiple objectives--relevance, user engagement, and platform revenue--when allocating impression slots to competing listings. Estimating the expected revenue component is well understood for fixed-price items, but becomes challenging when marketplace inventory includes mixed listing formats such as pure auctions and hybrid"Auction with Buy It Now"(ABIN) items, where prices evolve dynamically and the final transaction value is unknown at ranking time. Yet auction and ABIN listings account for a meaningful share of inventory and transaction volume on platforms such as eBay, and are a popular format for individual sellers and for unique items with unclear value. We extend the standard Expected Cost-per-Mille (eCPM) framework to auction and ABIN listings by deriving a marginal eCPM (meCPM) that captures the incremental value of showing one more impression of an item whose price is still evolving. The resulting formulation extends the familiar fixed-price eCPM--which is already inherently marginal--to auction dynamics, allowing unified ranking of fixed-price, auction, and ABIN listings under a single objective. We then describe a practical production implementation that approximates this objective, addressing cold-start challenges by bootstrapping from existing engagement models. Online A/B tests at a large e-commerce platform showed positive revenue gains and statistically significant improvements to user metrics, and the system was deployed to production.