Online display advertising platforms rely on pre-ranking systems to efficiently filter and prioritize candidate ads from large corpora, balancing relevance to users with strict computational constraints. The prevailing two-tower architecture, though highly efficient due to its decoupled design and pre-caching, suffers from cross-domain interaction and coarse similarity metrics, undermining its capacity to model complex user-ad relationships. In this study, we propose the Hierarchical Interaction-Enhanced Two-Tower (HIT) model, a new architecture that augments the two-tower paradigm with two key components: generators that pre-generate holistic vectors incorporating coarse-grained user-ad interactions through a dual-generator framework with a cosine-similarity-based generation loss as the training objective, and multi-head representers that project embeddings into multiple latent subspaces to capture fine-grained, multi-faceted user interests and multi-dimensional ad attributes. This design enhances modeling effectiveness without compromising inference efficiency. Extensive experiments on public datasets and large-scale online A/B testing on Tencent's advertising platform demonstrate that HIT significantly outperforms several baselines in relevance metrics, yielding a 1.66% increase in Gross Merchandise Volume and a 1.55% improvement in Return on Investment, alongside similar serving latency to the vanilla two-tower models. The HIT model has been successfully deployed in Tencent's online display advertising system, serving billions of impressions daily. The code is available at https://github.com/HarveyYang123/HIT_model.

In real-time bidding systems, ad exchanges and supply-side platforms (SSP) are switching from the second-price auction (SPA) to the first-price auction (FPA), where the advertisers should pay what they bid if they win the auction. To avoid overpaying, advertisers are motivated to conceal their truthful evaluations of impression opportunities through bid shading methods. However, advertisers are consistently facing a trade-off between the probability and cost-saving of winning, due to the information asymmetry, where advertisers lack knowledge about their competitors' bids in the market. To address this challenge, we propose a Bayes ian Multi-Armed Bandit (BayesMAB) algorithm for bid shading when the winning price is unknown to advertisers who lose the impression opportunity. BayesMAB incorporates the mechanism of FPA to infer each price interval's winning rate by progressively updating the market price hidden by SSP. In this way, BayesMAB better approximates the winning rates of price intervals and thus is able to derive the optimal shaded bid that balances the trade-off between the probability and cost-saving of winning the impression opportunity. We conducted large-scale A/B tests on Tencent's online display advertising platform. The cost-per-mile (CPM) and cost-per-action (CPA) decreased by 13.06% and 11.90%, respectively, whereas the return on investment (ROI) increased by 12.31% with only 2.7% sacrifice of the winning rate. We also validated BayesMAB's superior performance in an offline semi-simulated experiment with SPA data sets. BayesMAB has been deployed online and is impacting billions of traffic every day. Codes are available at https://github.com/BayesMAB/BayesMAB.

The real-time bidding (RTB) paradigm allows the advertisers to submit a bid for each impression in online display advertising. A usual demand of the advertisers is to maximize the total value of winning impressions under constraints on some key performance indicators. Unfortunately, the existing RTB research in industrial applications can hardly achieve the optimum due to the stochastic decision scenarios and complex consumer behaviors. In this study, we address the application of RTB to mobile gaming where the in-app purchase action is of high uncertainty, making it challenging to evaluate individual impression opportunities. We first formulate the bidding process into a constrained optimization problem and then propose an actor-critic reinforcement learning (ACRL) model for obtaining the optimal policy under a dynamic decision environment. To avoid feeding too many samples with zero labels to the model, we provide a new way to quantify impression opportunities by integrating the in-app actions, such as conversion and purchase, and the characteristics of the candidate ad inventories. Moreover, the proposed ACRL learns a Gaussian distribution to simulate the audience's decision in a more real bidding scenario by taking additional contextual side information about both media and the audience. We also introduce how to deploy the learned model online to help adjust the final bid. At last, we conduct comprehensive offline experiments to demonstrate the effectiveness of ACRL and carefully set an online A/B testing experiment. The online experimental results verify the efficacy of the proposed ACRL in terms of multiple critical commercial indicators. ACRL has been deployed in the Tencent online display advertising platform and impacts billions of traffic every day. We believe proposed modifications for optimal bidding problems in RTB are practically innovative and can inspire the relative works in this field.