Patrick Maillé, Institut Mines-Telecom/Telecom Bretagne, Bruno Tuffin, Inria, Rennes

Séminaire DIRO

Auctions for online ad space among advertisers sensitive to both views and clicks

Patrick Maillé, Institut Mines-Telecom/Telecom Bretagne, Bruno Tuffin, Inria, Rennes

Site web : http://en.diro.umontreal.ca/our-department/50th-anniversary-speaker-emer...

Abstract:

Advertisement in dedicated webpage spaces or in search engines sponsored slots is usually sold using auctions, with a payment rule that is either per impression or per click. But advertisers can be both sensitive to being viewed (brand awareness effect) and being clicked (conversion into sales).  During this talk, we first present adword auctions. We then generalize the currently used auction mechanism by including both pricing components: the advertisers are charged when their ad is displayed, and pay an additional price if the ad is clicked. Applying the results for Vickrey-Clarke-Groves (VCG) auctions, we show how to compute payments to ensure incentive compatibility from advertisers as well as maximize the total value extracted from the advertisement slot(s). We provide tight upper bounds for the loss of efficiency due to applying only pay-per-click (or pay-per-view) pricing instead of our scheme. Those bounds depend on the joint distribution of advertisement visibility and population likelihood to click on ads, and can help identify situations where our mechanism yields significant improvements. We also describe how the commonly used generalized second price (GSP) auction can be extended to this context.