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Sequential Sponsored-Products and Off-Amazon Advertising Optimization for Etailers

Yina Ning et al.

Production and Operations Management2026https://doi.org/10.1177/10591478261415690article
FT50UTD24AJG 4ABDC A*
Weight
0.50

Abstract

Sponsored-products (SP) advertising is a popular way to promote products on Amazon. Etailers who have a large catalog of products often create SP ad groups for products with similar attributes. An SP ad group consists of a set of products that share a same keyword set used for product search. In addition to SP ads, etailers may link to external websites for advertising their products, which is called off-Amazon (OA) ads. This study focuses on the optimization of sequential SP and OA (abbreviated as SSPOA) ads decisions for etailers. We model the SSPOA optimization as a controlled Markovian multi-armed bandit (MAB) process. When the mean sales volume per unit time (i.e., sales rate) for each product is known, we characterize the etailer’s optimal SSPOA policy for products in an ad group. When the parameters of the sales rates are unknown, we develop a Thompson-sampling-based algorithm that couples the SP and OA ads decisions. We prove that the regret bound of the proposed algorithm is O ~ ( T ) , where T is the total horizon length. Compared with existing literature, our problem additionally considers the regret from applying the estimated control policy and the impacts of choosing non-optimal keyword sets on subsequent states. We also conduct numerical experiments that validate our theoretical results. Moreover, we extend the base model in several directions, that is, considering unknown transition rates between different sales rate levels, incorporating correlated keyword sets, and learning the optimal policy using Posterior Sampling for reinforcement learning under a discretized setting.

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https://doi.org/https://doi.org/10.1177/10591478261415690

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@article{yina2026,
  title        = {{Sequential Sponsored-Products and Off-Amazon Advertising Optimization for Etailers}},
  author       = {Yina Ning et al.},
  journal      = {Production and Operations Management},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1177/10591478261415690},
}

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Sequential Sponsored-Products and Off-Amazon Advertising Optimization for Etailers

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.