Design a CPA system for ad bidding

Q: Design a CPA system for ad bidding

This question evaluates a candidate's competency in ML system design for online advertising, covering modeling conversion probability and value (e.g., CVR and conversion delay), bid computation, and operational challenges like delayed/attributed conversions, sparse data, and fraud mitigation.

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Question

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You are designing an ads bidding/optimization system where advertisers care about CPA (cost per acquisition).

Describe how you would design a system to optimize toward a target CPA while still participating in an auction.

Cover:

What the objective is (platform vs advertiser) and how CPA is defined.
What models you need (e.g., CVR, value, conversion delay).
How to compute bids from predictions (e.g., bid shading, target CPA control).
How you handle delayed/attributed conversions, sparse data, and fraud.
Offline evaluation and online A/B testing metrics for CPA systems.

Design a CPA system for ad bidding

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