Bidding for Representative Allocations for Display Advertising
Abstract
Display advertising has traditionally been sold via guaranteed contracts -- a guaranteed contract is a deal between a publisher and an advertiser to allocate a certain number of impressions over a certain period, for a pre-specified price per impression. However, as spot markets for display ads, such as the RightMedia Exchange, have grown in prominence, the selection of advertisements to show on a given page is increasingly being chosen based on price, using an auction. As the number of participants in the exchange grows, the price of an impressions becomes a signal of its value. This correlation between price and value means that a seller implementing the contract through bidding should offer the contract buyer a range of prices, and not just the cheapest impressions necessary to fulfill its demand. Implementing a contract using a range of prices, is akin to creating a mutual fund of advertising impressions, and requires {\em randomized bidding}. We characterize what allocations can be implemented with randomized bidding, namely those where the desired share obtained at each price is a non-increasing function of price. In addition, we provide a full characterization of when a set of campaigns are compatible and how to implement them with randomized bidding strategies.
Keywords
Cite
@article{arxiv.0910.0880,
title = {Bidding for Representative Allocations for Display Advertising},
author = {Arpita Ghosh and Preston McAfee and Kishore Papineni and Sergei Vassilvitskii},
journal= {arXiv preprint arXiv:0910.0880},
year = {2009}
}