Economics
of Web-Design
Yury Lifshits
Caltech

http://yury.name



  CS Club, Steklov Institute, 2008

                   ...
A camel is a horse designed by
a committee
                   Vogue’1958




                                 2 / 35
A camel is a horse designed by
a committee
                   Vogue’1958

Less is more




                               ...
A camel is a horse designed by
a committee
                   Vogue’1958

Less is more

         1855, Robert Browning
   ...
Outline


1   Anti-AdWords Theorem




                           3 / 35
Outline


1   Anti-AdWords Theorem

2   Dynamic Design




                           3 / 35
Outline


1   Anti-AdWords Theorem

2   Dynamic Design

3   Hit Counter Project Proposal




                             ...
1
Anti-AdWords Theorem




                       4 / 35
Problem Statement



Given 10 organic search results
and 5 sponsored results
place them on 15 slots on a webpage




     ...
Math model (1/2)

Every link i:
  Price pi
  Relevance ri




                   6 / 35
Math model (1/2)

Every link i:
  Price pi
  Relevance ri
  Attractiveness ai




                      6 / 35
Math model (1/2)

Every link i:
  Price pi
  Relevance ri
  Attractiveness ai

Every slot j:
  Attention share sj

       ...
Math Model (2/2)


Matching M:
 Place every link i to slot j = M(i)




                                   7 / 35
Math Model (2/2)


Matching M:
 Place every link i to slot j = M(i)

User clicks on link i
with probability proportional t...
Payoffs
Expected relevance:




                      8 / 35
Payoffs
Expected relevance:
               15
    Rel(M) =         (sM(i) + ai) · ri
               i=1




              ...
Payoffs
Expected relevance:
               15
    Rel(M) =         (sM(i) + ai) · ri
               i=1

Expected revenue:...
Payoffs
Expected relevance:
               15
    Rel(M) =         (sM(i) + ai) · ri
               i=1

Expected revenue:...
Payoffs
Expected relevance:
                   15
      Rel(M) =           (sM(i) + ai) · ri
                   i=1

Expec...
Pareto-Optimal Matching


M is Pareto-Optimal iff there is no M such that

     Rel(M) < Rel(M ),   Rev(M) < Rev(M )




 ...
Pareto-Optimal Matching


M is Pareto-Optimal iff there is no M such that

     Rel(M) < Rel(M ),   Rev(M) < Rev(M )



Ot...
Example (1/2)


Attention Link Relevance Price
     50% O1            2     -
     40%    A1         0 25$
     10%    A2 ...
Example (2/2)


Attention Link Relevance Price
     50%    A2         1  20$
     40% O1            2     -
     10%    A1...
Anti-AdWords

Left — organic, right —
advertising




                          12 / 35
Anti-AdWords

Left — organic, right —
advertising
Under presented model
AdWords design can be stupid




                 ...
Anti-AdWords

Left — organic, right —
advertising
Under presented model
AdWords design can be stupid

That is, another pre...
Notation

Page attention structure P:
20% 18% 15% . . . 4% 2%




                              13 / 35
Notation

Page attention structure P:
20% 18% 15% . . . 4% 2%

Fixed design D:
  Ad slots, organic slots
20% 18% 15% . . ....
Anti-AdWords Theorem
            ∀P ∀∗ D
      ∃ links L such that
     any matching M ∈ D
         is stupid for L



   ...
Alternative to AdWords



Single list for sponsored and
organic results




                                15 / 35
Alternative to AdWords



Single list for sponsored and
organic results
Tradeoff ranking



                              ...
Further questions

Do we need to keep 10 Organic
guarantee?




                            16 / 35
Further questions

Do we need to keep 10 Organic
guarantee?
Adwords redundancy?




                            16 / 35
Further questions

Do we need to keep 10 Organic
guarantee?
Adwords redundancy?
Quantify possible Adwords
inprovements


 ...
Further questions

Do we need to keep 10 Organic
guarantee?
Adwords redundancy?
Quantify possible Adwords
inprovements
Fin...
2
Dynamic Design




                 17 / 35
Increase Key Numbers



  Owners utility
  User utility




                       18 / 35
Key Numbers for Owner




                        19 / 35
Key Numbers for Owner

  Ad revenue
  Number of users
  Volume of content
  Amount of feedback
  User time online
  Brand ...
Key Numbers for User




                       20 / 35
Key Numbers for User

  # of matches (dating)
  # of job offers
  # of answers (QA)
  # interesting stories (news)
  # of ...
Design
          =
tool for increasing
  key numbers




                      21 / 35
Main Challenge




                 22 / 35
Main Challenge




Quantify Design




                  22 / 35
Design Decisions



  What to display
  With what priorities?




                          23 / 35
Quantify Internal Priorities




Attention budgets and auctions




                               24 / 35
Dynamic Design



Choices based on opportunity
(user, action, time) knowledge




                                 25 / 35
Design Mechanisms




                    26 / 35
Design Mechanisms

  Chosen by owner
  Fresh
  User voted
  Random
  Personalized
  Paid
                    26 / 35
Minimalism?


  Design complexity = # of links
  Links with CTR < .001 are worse
  than ads
  One random big instead many
...
Links to kill



   Amazon: “Add to wedding registry”
   Google: “Report yourself”
   Yahoo: “Horoscopes”




            ...
Django MTV Tricks



  Template inheritance
  If/for loops in templates
  Exceptions



                              29 /...
3
Hit Counter Project Proposal




                               30 / 35
Hit Analysis



  Easy: incoming hits
  Hard: outgoing hits




                        31 / 35
Outgoing Hits

  Ajax solution




                  32 / 35
Outgoing Hits

  Ajax solution
  Can be blocked




                   32 / 35
Outgoing Hits

  Ajax solution
  Can be blocked

  Inverted index




                   32 / 35
Outgoing Hits

  Ajax solution
  Can be blocked

  Inverted index




                   32 / 35
Outgoing Hits

  Ajax solution
  Can be blocked

  Inverted index
  Internal hits only

  Goto

                       32 ...
Outgoing Hits

  Ajax solution
  Can be blocked

  Inverted index
  Internal hits only

  Goto
  Bad for SEO

            ...
Call for Feedback




  Volunteers for hit counter
  project?




                               33 / 35
Links

http://yury.name
Homepage




http://yury.name/newweb.html
Tutorial “The New Web”


http://yury.name/reputation.htm...
Thanks for your attention!
       Questions?




                             35 / 35
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"Economics of Web Design" by Yury Lifshits

  1. 1. Economics of Web-Design Yury Lifshits Caltech http://yury.name CS Club, Steklov Institute, 2008 1 / 35
  2. 2. A camel is a horse designed by a committee Vogue’1958 2 / 35
  3. 3. A camel is a horse designed by a committee Vogue’1958 Less is more 2 / 35
  4. 4. A camel is a horse designed by a committee Vogue’1958 Less is more 1855, Robert Browning (English poet) 2 / 35
  5. 5. Outline 1 Anti-AdWords Theorem 3 / 35
  6. 6. Outline 1 Anti-AdWords Theorem 2 Dynamic Design 3 / 35
  7. 7. Outline 1 Anti-AdWords Theorem 2 Dynamic Design 3 Hit Counter Project Proposal 3 / 35
  8. 8. 1 Anti-AdWords Theorem 4 / 35
  9. 9. Problem Statement Given 10 organic search results and 5 sponsored results place them on 15 slots on a webpage 5 / 35
  10. 10. Math model (1/2) Every link i: Price pi Relevance ri 6 / 35
  11. 11. Math model (1/2) Every link i: Price pi Relevance ri Attractiveness ai 6 / 35
  12. 12. Math model (1/2) Every link i: Price pi Relevance ri Attractiveness ai Every slot j: Attention share sj 6 / 35
  13. 13. Math Model (2/2) Matching M: Place every link i to slot j = M(i) 7 / 35
  14. 14. Math Model (2/2) Matching M: Place every link i to slot j = M(i) User clicks on link i with probability proportional to sM(i) + ai 7 / 35
  15. 15. Payoffs Expected relevance: 8 / 35
  16. 16. Payoffs Expected relevance: 15 Rel(M) = (sM(i) + ai) · ri i=1 8 / 35
  17. 17. Payoffs Expected relevance: 15 Rel(M) = (sM(i) + ai) · ri i=1 Expected revenue: 8 / 35
  18. 18. Payoffs Expected relevance: 15 Rel(M) = (sM(i) + ai) · ri i=1 Expected revenue: 15 Rev(M) = (sM(i) + ai) · pi i=1 8 / 35
  19. 19. Payoffs Expected relevance: 15 Rel(M) = (sM(i) + ai) · ri i=1 Expected revenue: 15 Rev(M) = (sM(i) + ai) · pi i=1 Attractiveness is not important 8 / 35
  20. 20. Pareto-Optimal Matching M is Pareto-Optimal iff there is no M such that Rel(M) < Rel(M ), Rev(M) < Rev(M ) 9 / 35
  21. 21. Pareto-Optimal Matching M is Pareto-Optimal iff there is no M such that Rel(M) < Rel(M ), Rev(M) < Rev(M ) Otherwise M is stupid 9 / 35
  22. 22. Example (1/2) Attention Link Relevance Price 50% O1 2 - 40% A1 0 25$ 10% A2 1 20$ 1.1 12$ 10 / 35
  23. 23. Example (2/2) Attention Link Relevance Price 50% A2 1 20$ 40% O1 2 - 10% A1 0 25$ 1.3 12.5$ 11 / 35
  24. 24. Anti-AdWords Left — organic, right — advertising 12 / 35
  25. 25. Anti-AdWords Left — organic, right — advertising Under presented model AdWords design can be stupid 12 / 35
  26. 26. Anti-AdWords Left — organic, right — advertising Under presented model AdWords design can be stupid That is, another presentation can improve both relevance and revenue 12 / 35
  27. 27. Notation Page attention structure P: 20% 18% 15% . . . 4% 2% 13 / 35
  28. 28. Notation Page attention structure P: 20% 18% 15% . . . 4% 2% Fixed design D: Ad slots, organic slots 20% 18% 15% . . . 4% 2% 13 / 35
  29. 29. Anti-AdWords Theorem ∀P ∀∗ D ∃ links L such that any matching M ∈ D is stupid for L 14 / 35
  30. 30. Alternative to AdWords Single list for sponsored and organic results 15 / 35
  31. 31. Alternative to AdWords Single list for sponsored and organic results Tradeoff ranking 15 / 35
  32. 32. Further questions Do we need to keep 10 Organic guarantee? 16 / 35
  33. 33. Further questions Do we need to keep 10 Organic guarantee? Adwords redundancy? 16 / 35
  34. 34. Further questions Do we need to keep 10 Organic guarantee? Adwords redundancy? Quantify possible Adwords inprovements 16 / 35
  35. 35. Further questions Do we need to keep 10 Organic guarantee? Adwords redundancy? Quantify possible Adwords inprovements Find all rankings on a trade-off curve 16 / 35
  36. 36. 2 Dynamic Design 17 / 35
  37. 37. Increase Key Numbers Owners utility User utility 18 / 35
  38. 38. Key Numbers for Owner 19 / 35
  39. 39. Key Numbers for Owner Ad revenue Number of users Volume of content Amount of feedback User time online Brand recognition 19 / 35
  40. 40. Key Numbers for User 20 / 35
  41. 41. Key Numbers for User # of matches (dating) # of job offers # of answers (QA) # interesting stories (news) # of compliments (social networks) 20 / 35
  42. 42. Design = tool for increasing key numbers 21 / 35
  43. 43. Main Challenge 22 / 35
  44. 44. Main Challenge Quantify Design 22 / 35
  45. 45. Design Decisions What to display With what priorities? 23 / 35
  46. 46. Quantify Internal Priorities Attention budgets and auctions 24 / 35
  47. 47. Dynamic Design Choices based on opportunity (user, action, time) knowledge 25 / 35
  48. 48. Design Mechanisms 26 / 35
  49. 49. Design Mechanisms Chosen by owner Fresh User voted Random Personalized Paid 26 / 35
  50. 50. Minimalism? Design complexity = # of links Links with CTR < .001 are worse than ads One random big instead many static small 27 / 35
  51. 51. Links to kill Amazon: “Add to wedding registry” Google: “Report yourself” Yahoo: “Horoscopes” 28 / 35
  52. 52. Django MTV Tricks Template inheritance If/for loops in templates Exceptions 29 / 35
  53. 53. 3 Hit Counter Project Proposal 30 / 35
  54. 54. Hit Analysis Easy: incoming hits Hard: outgoing hits 31 / 35
  55. 55. Outgoing Hits Ajax solution 32 / 35
  56. 56. Outgoing Hits Ajax solution Can be blocked 32 / 35
  57. 57. Outgoing Hits Ajax solution Can be blocked Inverted index 32 / 35
  58. 58. Outgoing Hits Ajax solution Can be blocked Inverted index 32 / 35
  59. 59. Outgoing Hits Ajax solution Can be blocked Inverted index Internal hits only Goto 32 / 35
  60. 60. Outgoing Hits Ajax solution Can be blocked Inverted index Internal hits only Goto Bad for SEO 32 / 35
  61. 61. Call for Feedback Volunteers for hit counter project? 33 / 35
  62. 62. Links http://yury.name Homepage http://yury.name/newweb.html Tutorial “The New Web” http://yury.name/reputation.html Tutorial “Reputation Systems” 34 / 35
  63. 63. Thanks for your attention! Questions? 35 / 35

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