Competition-Aware CPC Forecasting with Near-Market Coverage

• URL: http://arxiv.org/abs/2603.13059v1
• Date: Fri, 13 Mar 2026 15:07:53 GMT
• Title: Competition-Aware CPC Forecasting with Near-Market Coverage
• Abstract summary: Cost-per-click (CPC) in paid search is a volatile auction outcome generated by a competitive landscape that is only partially observable from any single's history.<n>We forecast weekly CPC for 1,811 keyword series and approximate latent competition through complementary signals derived from keyword text, CPC trajectories, and geographic market structure.<n>The results show that broad market-outcome coverage, combined with keyword-derived semantic and geographic priors, provides a scalable way to approximate latent competition.
• Score: 0.15635627702544694
• License: http://creativecommons.org/licenses/by/4.0/
• Abstract: Cost-per-click (CPC) in paid search is a volatile auction outcome generated by a competitive landscape that is only partially observable from any single advertiser's history. Using Google Ads auction logs from a concentrated car-rental market (2021--2023), we forecast weekly CPC for 1,811 keyword series and approximate latent competition through complementary signals derived from keyword text, CPC trajectories, and geographic market structure. We construct (i) semantic neighborhoods and a semantic keyword graph from pretrained transformer-based representations of keyword text, (ii) behavioral neighborhoods via Dynamic Time Warping (DTW) alignment of CPC trajectories, and (iii) geographic-intent covariates capturing localized demand and marketplace heterogeneity. We extensively evaluate these signals both as stand-alone covariates and as relational priors in spatiotemporal graph forecasters, benchmarking them against strong statistical, neural, and time-series foundation-model baselines. Across methods, competition-aware augmentation improves stability and error profiles at business-relevant medium and longer horizons, where competitive regimes shift and volatility is most consequential. The results show that broad market-outcome coverage, combined with keyword-derived semantic and geographic priors, provides a scalable way to approximate latent competition and improve CPC forecasting in auction-driven markets.

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