A Bidding Strategy of Intermediary in Display Advertisement Auctions

Display advertisements are a type of web advertisement, which are usually images or movies that are displayed as a part of web page. In a display advertisement market we consider that media sites (advertising media) are sellers, that ad spaces are goods, and that advertisers are buyers. Previously, a fixed price was set for displaying advertisements and ad agencies mediated the transaction. However, auctions have been introduced to this transaction. Second price auctions are used as the auction method, and we consider that this auction is also a sequential auction in terms of trading the same ad space constantly. We cannot find remarkable features in this method of display advertisement auctions. However, advertisers, who are the end buyers, who do not directly bid, but intermediaries called DSP (Demand Side Platform) do. DSPs have a number of advertisers as their clients, and take bids instead of advertisers to satisfy advertiser's constraints such as a budget constraint. Although a DSP competes against other DSPs, it has the space to coordinate bidding among its clients. We consider that this auction allows a part of bidders colludes with each other in a conventional auction theory. Therefore, an efficient bidding strategy is not present. In this study, I aimed to propose an efficient bidding strategy for the intermediaries. To achieve this goal, we focused on following problems: Proposal on an efficient bidding strategy The strategy which is currently used by DSPs is seemingly reasonable. Nevertheless, they have problems such as an overpayment for ad spaces. Therefore, I must reveal why above-mentioned problems occurred, and propose the bidding strategy to solve this problem. Analysis of auctions for the case of applying the proposed strategy I must measure a performance of the proposed strategy to evaluate whether or not the proposed strategy is more efficient than the existing strategy. In addition, I need to comprehend the effect of the proposed strategy by analyzing auction data of the evaluation in order to predict what is going to happen if the ii proposed strategy is introduced. In order to solve the first problem, I first pointed the problem that the existing strategy treated display advertisement auctions as single unit auctions despite the fact that display advertisement auctions are originally multi unit auctions, and proposed the bidding strategy that a DSP coordinated bidding among its clients and decided bidding prices to ad spaces on day to day basis. Advertiser's demands …