Conference Paper

Google's auction for TV ads

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Abstract

This talk will describe the auction that Google uses for allocation and pricing of TV ads. The talk describes the actual system and puts it in proper theoretical context.

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... In terms of advertisement slot pricing, cable TV typically uses projected or actual viewership statistics to determine how much to charge advertisers; pricing is based on the number of viewers of said commercial (methods such as Nielsen ratings use statistical sampling to estimate viewership statistics, while methods such as Google TV [10] use real-time viewership statistics.) An advertisement allocation and charging system, such as that used by Google TV, uses an auction based on prior viewership statistics to assign advertisements to different ad slots and subsequently charges advertisers based on the actual number of viewers of their respective advertisement slot. ...
... We also present a P-time algorithm, which can be run in real-time, to determine the revenue maximizing assignment of the advertisers to the set of advertising slots. Models such as [10] charge the advertisers ex-post, i.e. the price that the advertisers pay depends not only on their budgets, but also on the actual number of viewers of their commercial. Our model does not require the per commercial feedback of the actual number of viewers in order to determine prices. ...
... In terms of advertisement slot allocation, the AO forwards the viewership statistics / extrapolated expected viewership and current price per advertising slot to the SP and the ADs via data-paths F and A, respectively. In response, each advertiser reports their demand curve for each advertisement, TV program preferences, and desired advertisement length to the AO via datapath B (current TV industry standards use an integer multiple of 15 seconds for advertisement lengths [10].) The AO then performs an auction to determine the revenue maximizing allocation of advertisements. ...
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... An alternative line of work deals with the adversarial setting, where no distributional assumption is made on the bidders' private valuations. In this setting, the budget constrained auction problem is notorious mainly because standard auction concepts such as VCG, efficiency, and competitive equilibria do not directly carry over [25]. Most previous results deal with the case of multiple units of a homogeneous good. ...
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... For instance, recent work [21,24] shows the impossibility of designing auctions that are Pareto-optimal in terms of welfare even in multi-unit settings. Furthermore, Nisan [29] show that competitive equilibria need not exist even when agents have additive valuations for items. The lone exceptions are positive results for simple multi-unit settings [21,24,7,1] with unlimited supply of the item. ...
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... This trend started in the sponsored search advertisements (such as, Google's AdWords, Yahoo!'s Search Marketing and Microsoft's AdCenter), and expended to the display advertisement (such as, Double click Ad Exchange [15]). This trend has even propagated to classical advertisement media, such as TV [17]. ...
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