Selling Online Display Advertising via Guaranteed Contracts and the Real-time Bidding Auctions
Citation:
Ye, Junchi, Selling Online Display Advertising via Guaranteed Contracts and the Real-time Bidding Auctions, Trinity College Dublin, School of Business, Business & Administrative Studies, 2024Download Item:
Abstract:
Online display advertising has become a principal revenue stream for a multitude of online publishers and content providers. This form of advertising involves selling 'impressions' or views of display advertisements to advertisers, which are then shown to internet users visiting the publisher's website or platform.
One primary selling mechanism for online display ads is guaranteed contracts. These contracts specify the quantity, timing, and characteristics of impressions to be delivered to advertisers, agreed upon before the impressions are actually realised. However, the development of Real-Time Bidding (RTB) has introduced a novel and dynamic way of selling impressions. RTB allows advertisers to place bids for each individual impression in real time as a user visits a webpage hosted by the publisher. This mechanism introduces competition among advertisers and allows for the price of each impression to be determined by their bids at the moment a webpage is loaded.
Both guaranteed contracts and RTB have their unique strengths and trade-offs. Guaranteed contracts provide certainty and planning capabilities for advertisers, allowing them to secure a certain amount of impressions in advance. On the other hand, RTB allows for more granular targeting and pricing based on real-time user data, offering the potential for improved advertising effectiveness. However, relying on a single selling channel for ad impressions, either guaranteed contracts or RTB, is insufficient due to the vast supply and diverse preferences of both publishers and advertisers. To address this, this thesis analyses publishers' optimal decisions and advertisers' strategic behaviour in different scenarios involving both guaranteed contracts and RTB.
The thesis comprises three research problems. First, it investigates the optimal pricing of guaranteed contracts in the presence of RTB to maximise publisher revenue. Second, it explores the recruiting strategy for additional advertisers and their impact on publishers' decisions and original advertisers' behaviour under different information settings. Finally, it examines the allocation strategy for impressions among dual channels, considering impression quality and different types of guaranteed contracts. Overall, the thesis makes several significant contributions to the literature on online advertising markets by developing novel models and providing comprehensive analyses of interactions between guaranteed contracts and RTB under various scenarios, information settings, and impression quality levels. The results provide valuable insights for publishers and advertisers in optimising their strategies within dual-channel online advertising markets.
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APPROVED
Author: Ye, Junchi
Advisor:
Huang, YufeiLiang, Xiaoning
Publisher:
Trinity College Dublin. School of Business. Discipline of Business & Administrative StudiesType of material:
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