Selective Call Out and Real Time Bidding

Display 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. A major issue is the infrastructure mismatch: the volume of impressions that come to the ad exchange is very large, but participating ad networks may have resource constraints and can not participate in every auction. Therefore, the exchange has to select which subset to call out and solicit bids. This aspect of soliciting the bid is a novel aspect in comparison to ad allocation problems considered in literature. We view this selective call out as an online decision problem with bandwidth type constraints. We present an algorithm that runs in almost linear time per auction, and guarantees roughly at least 1−1/e of the expected maximum market efficiency achievable by any algorithm that obeys the call out constraints, even with unlimited computational power and certain foreknowledge of the sequence of arriving ad slots (but the bids are still probabilistic). The analysis extend to other variants, such as in the posted price auction variant, where we provide a 1 2 approximation of the total revenue of the best posted price algorithm that obeys the call-out constraints. We show that these results hold under different impression arrival models, and to the best of our knowledge, this aspect, in combination with bounded performance guarantees, had not been considered in the ad allocation literature.