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Operations of Online Advertising Services and Publisher's Option

9 Pages Posted: 21 Apr 2012  

A. Srinivasan

affiliation not provided to SSRN

C. Kwon

affiliation not provided to SSRN

Date Written: May 2012

Abstract

We analyse the use of options for online advertisement publishers. By providing a discount or rewards to advertisers, publishers can utilise their uncertain service capacity, page-views, more efficiently. We use Generalised Nash Bargaining to study the feasibility of the option contract and solve for an optimal value for the option price. We compare the revenues and benefits from advertisements under the option contract, with those without the options using numerical studies. We also study the impact of pricing and other components in the game on the optimal option price, the publisher's revenues, and the advertiser's benefits from the advertisements.

Suggested Citation

Srinivasan, A. and Kwon, C., Operations of Online Advertising Services and Publisher's Option (May 2012). Journal of the Operational Research Society, Vol. 63, Issue 5, pp. 674-682, 2012. Available at SSRN: https://ssrn.com/abstract=2043007 or http://dx.doi.org/10.1057/jors.2011.84

A. Srinivasan (Contact Author)

affiliation not provided to SSRN

No Address Available

C. Kwon

affiliation not provided to SSRN

No Address Available

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