Notes on Muthukrishnan, Ad Exchanges: Auctions and Optimizations

As with all my handwritten notes, this has the usual disclaimer: these posts are just so I can use nice indexed search to find my notes, which are sufficient for me to recall talks and papers but probably not much use to anyone else. Slides here.

Activities on the Internet can be abstracted as interactions due to the users who navigate to various web pages, the publishers who control the web pages and generate the content in them, and advertisers who wish to get the attention of the users using the publishers as the channel for placing ads on the pages. Precisely what ads show when a user accesses a page is a detailed process. Traditionally, this is determined by negotiations between publishers and advertisers. An emerging way of selling and buying ads on the Internet is via an exchange that brings sellers (publishers) and buyers (advertisers) together to a common marketplace. Ad exchanges are recent. Publishers expect to get the best price from the exchange, better than from any specific ad network; in addition, publishers get liquidity. Advertisers get access to a large inventory at the exchange, and in addition, the ability to target more precisely across web pages. Finally, the exchange is a clearing house ensuring the flow of money. In many ways, these ad exchanges are modeled after financial stock exchanges. Since 2005 when RightMedia appeared, ad exchanges have become popular. In Sept 2009, RightMedia averaged 9 billion transactions a day with 100’s of thousands of buyers and sellers. Recently, DoubleClick announced their new ad exchange. It seems ad exchanges are likely to become a major platform for trading ads. In this tutorial, we will discuss the context of ad exchanges as well as the auction and optimization problems that arise.

Notes on Muthukrishnan, Ad Exchanges: Auctions and Optimizations

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