Abstract

https://ssrn.com/abstract=2693037
 


 



Deals or No Deals: Contract Design for Online Advertising


Vahab Mirrokni


Google, Inc.

Hamid Nazerzadeh


University of Southern California - Marshall School of Business

November 19, 2015


Abstract:     
Billions of dollars worth of display advertising are sold via contracts and deals. This paper is the first formal study of preferred deals, a new generation of contracts for selling online advertisement that generalize the traditional reservation contracts; these contracts are suitable for advertisers with advanced targeting capabilities. We propose an approximation algorithm for maximizing the revenue that can be obtained from these deals. We evaluate our algorithm using data from Google's ad exchange platform. Our algorithm obtains about 90% of the optimal revenue. Furthermore, we show, both theoretically and via data analysis, that deals, with appropriately chosen minimum-purchase guarantees, can yield significantly higher revenue than auctions.

Number of Pages in PDF File: 25


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Date posted: November 19, 2015  

Suggested Citation

Mirrokni, Vahab and Nazerzadeh, Hamid, Deals or No Deals: Contract Design for Online Advertising (November 19, 2015). Available at SSRN: https://ssrn.com/abstract=2693037 or http://dx.doi.org/10.2139/ssrn.2693037

Contact Information

Vahab Mirrokni
Google, Inc. ( email )
1600 Amphitheatre Parkway
Second Floor
Mountain View, CA 94043
United States
Hamid Nazerzadeh (Contact Author)
University of Southern California - Marshall School of Business ( email )
Bridge Memorial Hall
Los Angeles, CA 90089
United States
HOME PAGE: http://www-bcf.usc.edu/~nazerzad/

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