Market Design in Display Advertising R. Preston McAfee Yahoo! - - PowerPoint PPT Presentation

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Market Design in Display Advertising R. Preston McAfee Yahoo! - - PowerPoint PPT Presentation

May 12, 2023 453 likes •563 views

Market Design in Display Advertising R. Preston McAfee Yahoo! Research - 1 - Yahoo! Confidential Display Advertising Impressions 2 11/2/2009 McAfee: Internet - 2 - Yahoo! Confidential Ad i i Display Advertising Contracts purchased

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Yahoo! Confidential

Market Design in Display Advertising

  • R. Preston McAfee

Yahoo! Research

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Yahoo! Confidential

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Display Advertising Impressions

11/2/2009 McAfee: Internet Ad i i

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Yahoo! Confidential

Display Advertising

  • Contracts purchased in advance
  • Typically guarantee number of impressions
  • Set types of eligible opportunities

– 30-40 year old males – Californians on auto pages

  • Supply random
  • Excess sold on spot market
  • Two main problems

– Cream-skimming – Orphan categories

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Yahoo! Confidential

Objective Function Requirements

  • Flexibility in serving
  • Spot revenue
  • Insuring quality of booked campaigns
  • Risk of under and over delivery
  • Handling orphan inventory categories
  • Scarcity pricing
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Yahoo! Confidential

Objective Function

Serving Representativeness Lost Spot Revenue Yj : Requested demand for contract j Bj : Eligible impressions for contract j xi : Available supply for impression i ri : Opportunity cost for impression i zi : Slack for impression i yj

i: Amount of impression i supply allocated to contract j

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Yahoo! Confidential

Objective Function

Scaling Weights

Serving Representativeness Lost Spot Revenue Yj : Requested demand for contract j Bj : Eligible impressions for contract j xi : Available supply for impression i ri : Opportunity cost for impression i zi : Slack for impression i yj

i: Amount of impression i supply allocated to contract j

Target Allocation Campaign Priority Guaranteed - Non Guaranteed Tradeoff Delivery Demand Met Supply Constraint

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Theorem

  • There is an implementation using randomized bidding into

an exchanges

  • Distribution of bids is uniform
  • Bidding distributions do not depend on type of inventory
  • Bidding distributions have closed forms
  • Can approximate without pricing orphaned categories!
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Key Innovations

  • Entire system designed to meet overall objective
  • Fine-grained targeting

– Forecasting, admission control and serving

  • Integrated pricing and allocation

– Price based on expected allocation

  • Business knobs control all trade-offs
  • Inventory allocation across guaranteed and spot

demand

– Unified marketplace

  • User modeling

Addresses Current Problems Forward Looking Innovations

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Thank you!