Core Insights - The article discusses the evolution and challenges of bidding algorithms in real-time bidding (RTB) advertising systems, emphasizing the transition from traditional methods to advanced techniques like generative reinforcement learning [2][3][7]. Group 1: Evolution of Bidding Algorithms - The bidding algorithm has evolved through three generations: PID, MPC, and reinforcement learning (RL), each improving upon the previous in terms of adaptability and effectiveness in complex bidding environments [5][6][7]. - The introduction of generative reinforcement learning aims to enhance decision-making by utilizing historical bidding sequences for more accurate predictions [8][10]. Group 2: Challenges in Bidding - Key challenges faced by bidding algorithms include the need to manage daily budgets while minimizing conversion costs, the unpredictability of traffic and competitor behavior, and the complexity of sequential decision-making [5][6]. - The reliance on high-quality datasets poses a challenge, as simple exploration can lead to out-of-distribution (OOD) issues, necessitating efficient offline exploration mechanisms [12][14]. Group 3: GAVE Algorithm - The GAVE algorithm integrates score-based return-to-go (RTG) and value function-based action exploration to enhance model learning and address the challenges of data quality and exploration [18][19]. - Experimental results show that GAVE outperforms baseline algorithms in various budget settings, demonstrating its effectiveness in maximizing conversion value [22][25]. Group 4: CBD Algorithm - The CBD algorithm introduces Completer and Aligner modules to improve the alignment of generated sequences with optimization goals, addressing issues of sequence legality and preference alignment [29][31]. - Offline experiments indicate that CBD significantly outperforms other methods in total conversion value, validating its effectiveness in real-world applications [34][36]. Group 5: Future Directions - Future advancements in bidding technology are expected to focus on developing foundational models that leverage multi-scenario data and enhancing interpretability and decision-making capabilities through the integration of large language models [41].

Group 1 - Alphabet, Google's parent company, recently surpassed a market capitalization of $3 trillion, becoming the fourth company to reach this milestone [1] - Despite initial concerns about its advertising revenue due to the rise of ChatGPT, Google managed to stabilize its ad revenue and enhance user intent understanding through generative AI integration [1] - In China, Kuaishou reported a 12.8% year-on-year increase in online marketing service revenue, reaching 19.8 billion yuan in Q2, driven by advancements in generative AI for ad bidding and recommendations [2] Group 2 - Kuaishou's new bidding algorithm, termed "Generative Reinforcement Learning," allows for multi-dimensional thinking in bid modeling, leading to over a 3% increase in ad revenue while maintaining cost targets [3][4] - The evolution of Kuaishou's bidding technology has progressed through several generations, culminating in the current fourth generation of "Generative Reinforcement Learning" [12] Group 3 - The GAVE algorithm, introduced by Kuaishou, addresses challenges in aligning bidding strategies with overall optimization goals, enhancing the effectiveness of ad bidding [22][24] - GAVE has shown significant improvements in performance metrics compared to previous models, achieving optimal results across various budget settings [31] Group 4 - The CBD algorithm, another innovation from Kuaishou, aims to resolve issues related to state sequence consistency and preference alignment in bidding strategies [35][37] - CBD has demonstrated superior performance in offline experiments, significantly outperforming baseline algorithms in total conversion value [41] Group 5 - Kuaishou's commercial algorithm team has achieved notable recognition in the industry, winning multiple awards and competitions, which translates into substantial business growth [44][47] - The advancements in generative reinforcement learning bidding technology are expected to continue evolving, with Kuaishou outlining future directions for further development [50]