Mercado Libre, e-commerce giant, reports a 25% increase in advertising clicks without affecting organic GMV.

Case Study: Mercado Libre Bidding System

Case Studies

Posted by Pedro Ferrari

on January 16, 2023 · 2 mins read

Mercado Libre, e-commerce giant, reports a 25% increase in advertising clicks without affecting organic GMV.

About The Company

MercadoLibre is the largest online commerce and payments ecosystem in Latin America. Through a suite of technology solutions including Mercado Pago, Mercado Ads, Mercado Envios, and Mercado Creditos they enable customers in 18 countries to carry out their commerce offering solutions across the entire value chain.

Challenge

The Product Ads Team (searched items promoted by Mercado Libre’s sellers) needed to develop an improved internal bidding system. Previous to this project, Mercado Libre’s platform used a batch process that determined the cost to be billed to each seller for the campaigns on promoted items. The result of this process was suboptimal since the previous methodology left many variables unoptimized, and revenue money wasn't optimal for lower bidders.

Solution

Mutt Data developed a new system running bidding in real time, as the search was made. The system performs CTR (Click Through Rate) and CVR (Conversion Rate) estimations on each item to determine their position while estimating the impact on the marketplace’s GMV (Gross Merchandise Volume) and deciding the optimum tradeoff. Aside from developing the system we participated in the research and design of it.

We're AWS Advanced Partners, and this project utilized AWS tools such as Amazon EKS and Amazon RDS.

Additionally, the needed modules and systems were implemented on Mercado Libre’s Cloud Architecture following their standards and seamlessly integrating with the rest of the systems.

Impact

Online tests showed an increase of more than 25% in the amount of clicks, without affecting the platform’s overall organic GMV in a significant manner.

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