A First Principle Approach to Advertising

Topsort was founded with the idea of building modern advertising infrastructure from first principles in both economics and engineering.

Topsort's infrastructure makes it easy to run banner ads or sponsored ads. The fundamental piece of information we use to run ads is organic results coming from search queries. This ensures that the advertised products will always come from what a marketplace decides is relevant for its users.

Example

Let’s say an advertiser wants to sponsor their brand, a cherry soda called Guinda. They login into the marketplace advertising platform (powered by Topsort), create a campaign and place a $3 bid for every click on the Guinda soda. The same advertiser could run the campaign on autobidding (in which case the marketplace will place the bids automatically based on market conditions and their specific ROAS target).

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So when a user comes to a marketplace running Topsort’s infrastructure and searches for a keyword or navigates to a specific category, in this case he searches for “cherry sodas”, this is what happens:

  1. Marketplace calls their search engine and passes the keyword “cherry sodas”, search engine returns a list of products to be rendered on the website.

  2. The server of the marketplace calls Topsort’s /auction API endpoint and sends them the list of products (most specifically product ids).

  3. Topsort checks if one or more of the products in that list belongs to an auction, let’s just say that Guinda has a bid of $3 and Dr. Peppers (a competing brand) has a bid for $2. Because the site has only 1 sponsored listings slot. We declared winner of the auction to the Guinda product.

  4. Topsort sends back to the marketplace server the list of winners of the auction (if any). In this case we send the product_id of the Guinda soda with an identifier (auction_id).

  5. Marketplace picks this information (alongside with the search results) and renders the product results. In position number one (and with the label sponsored) shows the Guinda soda and then the rest of the results.

  6. If a user clicks on the Guinda sponsored product, marketplace will send us the click information (same as if the user buys the product) by calling our /events API and we will record and display on the advertising platform for the advertiser to see.

Our system is simple and easy to integrate (it just needs 2 API endpoints /auctions and /events). It doesn’t depend on category mappings, or taxonomies.

In other words, you could be running an advertising platform on your site with no more information than the one you already have.

Topsort provides complete flexibility to target audiences (for example is this a new user, or is the user on a given location), provide extra information you want to pass (like the category or keyword):

The way we make requests work is also simple. Every bid has an internal vectorial representation in our systems, called a bid vector. We allow these bid vectors to move incredibly fast through our events machinery.

If you want to target a specific location and specify for a new user, you can pass that information alongside the product IDs and we will add them into the bid vector. We add our own internal calculations to the bid vector, for example a quality score (we weight auctions by a quality score so if a product sells very well it will be cheaper to advertise) and a pacing score (we might decide to bid or not depending on how fast a budget is being consumed). We can also change the quantity of a bid on the fly when the system is on autobidding mode.

Topsort’s infrastructure has been designed with a simple robust architecture based on first principles of economics design and engineering which allows to add sophisticated ML models that automate auctions and makes it simple, accessible and easy to use for any type of advertiser and marketplace.


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