Patent Document ID: 8234170
Application ID: 12693390
Patent Flag: 1

Claim One:
1. A machine-controlled method, comprising: a machine estimating an expected conversion rate for each of a plurality of ads based at least in part on a first latent variable by applying an estimated conversion rate statistical model to each of the plurality of ads; the machine estimating an expected average order value (AOV) for each of the plurality of ads based at least in part on a second latent variable by applying an estimated AOV statistical model to each of the plurality of ads; the machine applying a first inference algorithm to determine a most likely value for the first latent variable based at least in part on observed data corresponding to the ads; the machine applying a second inference algorithm to determine a most likely value for the second latent variable based at least in part on the observed data corresponding to the ads; and the machine determining a plurality of auction bids based on the estimated expected conversion rate and the estimated expected AOV, wherein determining the auction bids comprises applying the following equation for each of the plurality of ads: b i = 1 T ⁢ ( β a ⁢ ⁢ ov + r i α a ⁢ ⁢ ov - 1 + x i ) ⁢ ( α cvr + x i β cvr + n i ) , where b i refers to the auction bid for an individual ad i, α aov and β aov are campaign-level parameters for the expected AOV for the ad i, α cvr and β cvr are campaign-level parameters for the expected conversion rate for the ad i, n i refers to a total number of observed clicks for the ad i, x i refers to a total number of observed conversions for the ad i, r i refers to a total of observed revenue associated with ad i, and T refers to a spend goal for the ad i.