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Online Ad Assignment with an Ad Exchange


Ad exchanges are becoming an increasingly popular way to sell advertisement slots on the internet. An ad exchange is basically a spot market for ad impressions. A publisher who has already signed contracts reserving advertisement impressions on his pages can choose between assigning a new ad impression for a new page view to a contracted advertiser or to sell it at an ad exchange. This leads to an online revenue maximization problem for the publisher. Given a new impression to sell decide whether (a) to assign it to a contracted advertiser and if so to which one or (b) to sell it at the ad exchange and if so at which reserve price. We make no assumptions about the distribution of the advertiser valuations that participate in the ad exchange and show that there exists a simple primal-dual based online algorithm, whose lower bound for the revenue converges to R_ADX + R_A (1 - 1/e), where R_ADX is the revenue that the optimum algorithm achieves from the ad exchange and R_A is the revenue that the optimum algorithm achieves from the contracted advertisers.

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Paper in Conference Proceedings or in Workshop Proceedings (Full Paper in Proceedings)
Event Title
Workshop on Approximation and Online Algorithms
Theory and Applications of Algorithms
Theoretische Informatik
Event Location
Wroclaw, Poland
Event Type
Event Dates
September 11–12
Series Name
Approximation and Online Algorithms - 12th International Workshop, WAOA 2014, Wroclaw, Poland, September 11-12, 2014, Revised Selected Papers
Page Range
pp. 156-167
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