Beyond IPS: Reliable Counterfactual Evaluation in Multi-Stage Ad Systems without Logged Propensities

Abstract

Offline evaluation of ad-ranking policies in multi-stage delivery systems is challenging because action propensities are often unavailable, limiting inverse propensity scoring (IPS). Reward-model-based estimators such as the Direct Method (DM) avoid propensities but can be biased when candidate policies induce impression distributions that differ from the logged data. We formalize DM-based counterfactual replay and propose mixture-weighted reward modeling, which reweights logged data toward a mixture of candidate-policy distributions using density ratios from a multiclass domain classifier. We bound each candidate's value-estimation error by overlap, cold-start, and replay terms, and derive an asymptotic rule that uses the cold-start mass to decide whether to trust offline selection or route candidates to online A/B testing. On an ads-delivery simulator and on production traffic from a large-scale CTR ranking system, the mixture-weighted reward model improves policy selection over its unweighted counterpart in both settings, with the largest gains at low overlap in simulation. Combined with a doubly robust correction, it attains the highest Top-1 accuracy in production and at low and medium overlap in simulation.