Internet and Network Economics

Volume 6484 of the series Lecture Notes in Computer Science pp 145-157

Selective Call Out and Real Time Bidding

  • Tanmoy ChakrabortyAffiliated withUniversity of Pennsylvania
  • , Eyal Even-DarAffiliated with 
  • , Sudipto GuhaAffiliated withUniversity of Pennsylvania
  • , Yishay MansourAffiliated withGoogle Israel and The Blavatnik School of Computer Science, Tel-Aviv University
  • , S. MuthukrishnanAffiliated withGoogle Research

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Ads on the Internet are increasingly sold via ad exchanges such as RightMedia, AdECN and Doubleclick Ad Exchange. These exchanges allow real-time bidding, that is, each time the publisher contacts the exchange, the exchange “calls out” to solicit bids from ad networks. This solicitation introduces a novel aspect, in contrast to existing literature. This suggests developing a joint optimization framework which optimizes over the allocation and well as solicitation.

We model this selective call out as an online recurrent Bayesian decision framework with bandwidth type constraints. We obtain natural algorithms with bounded performance guarantees for several natural optimization criteria. We show that these results hold under different call out constraint models, and different arrival processes. Interestingly, the paper shows that under MHR assumptions, the expected revenue of generalized second price auction with reserve is constant factor of the expected welfare. Also the analysis herein allow us prove adaptivity gap type results for the adwords problem.