Bidding for Representative Allocations for Display Advertising

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 randomized bidding. We characterize what allocations can be...

• Type: Conference
• Year: 2009
• Where: WINE
• Authors: Arpita Ghosh, Randolph Preston McAfee, Kishore Papineni, Sergei Vassilvitskii
• Keywords: Display Advertising, Economy, Pre-specified Price, Randomized Bidding, WINE 2009