Abstract
Ad exchanges are becoming an increasingly popular way to sell advertisement slots on the internet. An ad exchange is basically a spot market for ad impressions. A publisher who has already signed contracts reserving advertisement impressions on his pages can choose between assigning a new ad impression for a new page view to a contracted advertiser or to sell it at an ad exchange. This leads to an online revenue maximization problem for the publisher. Given a new impression to sell decide whether (a) to assign it to a contracted advertiser and if so to which one or (b) to sell it at the ad exchange and if so at which reserve price. We make no assumptions about the distribution of the advertiser valuations that participate in the ad exchange and show that there exists a simple primal-dual based online algorithm, whose lower bound for the revenue converges to \(R_{ADX} + R_A (1 - 1/e)\), where \(R_{ADX}\) is the revenue that the optimum algorithm achieves from the ad exchange and \(R_A\) is the revenue that the optimum algorithm achieves from the contracted advertisers.
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Notes
- 1.
The reserve price is the minimum required price at which an impression is sold at an ad auction. If no offer is at or above the reserve price, the impression is not sold.
- 2.
It is straightforward to extend the algorithm and its analysis to multiple ad exchanges.
- 3.
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Acknowledgments
The research leading to these results has received funding from the European Research Council under the European Union’s Seventh Framework Programme (FP/2007-2013)/ERC Grant Agreement no. 340506 and from the Vienna Science and Technology Fund (WWTF) through project ICT10-002. The authors are grateful to Claire Kenyon and Moses Charikar for useful discussions on formulating the model.
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Dvořák, W., Henzinger, M. (2015). Online Ad Assignment with an Ad Exchange. In: Bampis, E., Svensson, O. (eds) Approximation and Online Algorithms. WAOA 2014. Lecture Notes in Computer Science(), vol 8952. Springer, Cham. https://doi.org/10.1007/978-3-319-18263-6_14
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DOI: https://doi.org/10.1007/978-3-319-18263-6_14
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