Pricing Algorithms For a Two-sided Internet Advertisement Market

The Google AdSense Program is a successful internet advertisement program where Google places contextual adverts on third-party websites and shares the resulting revenue with each publisher. Advertisers have budgets and bid on ad slots while publishers set reserve prices for the ad slots on their websites. Following previous modelling efforts, we model the program as a two-sided market with advertisers on one side and publishers on the other. We show a reduction from the Generalised Assignment Problem (GAP) to the problem of computing the revenue maximising allocation and pricing of publisher slots under a first-price auction. GAP is APX-hard but a (1-1/e) approximation is known. We compute truthful and revenue-maximizing prices and allocation of ad slots to advertisers under a second-price auction. The auctioneer's revenue is within (1-1/e) second-price optimal.

Evaluation of a Load Profiling Approach to Routing Guaranteed Bandwidth Flows

To support the diverse Quality of Service (QoS) requirements of real-time (e.g. audio/video) applications in integrated services networks, several routing algorithms that allow for the reservation of the needed bandwidth over a Virtual Circuit (VC) established on one of several candidate routes have been proposed. Traditionally, such routing is done using the least-loaded concept, and thus results in balancing the load across the set of candidate routes. In a recent study, we have established the inadequacy of this load balancing practice and proposed the use of load profiling as an alternative. Load profiling techniques allow the distribution of "available" bandwidth across a set of candidate routes to match the characteristics of incoming VC QoS requests. In this paper we thoroughly characterize the performance of VC routing using load profiling and contrast it to routing using load balancing and load packing. We do so both analytically and via extensive simulations of multi-class traffic routing in Virtual Path (VP) based networks. Our findings confirm that for routing guaranteed bandwidth flows in VP networks, load balancing is not desirable as it results in VP bandwidth fragmentation, which adversely affects the likelihood of accepting new VC requests. This fragmentation is more pronounced when the granularity of VC requests is large. Typically, this occurs when a common VC is established to carry the aggregate traffic flow of many high-bandwidth real-time sources. For VP-based networks, our simulation results show that our load-profiling VC routing scheme performs better or as well as the traditional load-balancing VC routing in terms of revenue under both skewed and uniform workloads. Furthermore, load-profiling routing improves routing fairness by proactively increasing the chances of admitting high-bandwidth connections.

Adaptive Weighing Designs for Keyword Value Computation

Attributing a dollar value to a keyword is an essential part of running any profitable search engine advertising campaign. When an advertiser has complete control over the interaction with and monetization of each user arriving on a given keyword, the value of that term can be accurately tracked. However, in many instances, the advertiser may monetize arrivals indirectly through one or more third parties. In such cases, it is typical for the third party to provide only coarse-grained reporting: rather than report each monetization event, users are aggregated into larger channels and the third party reports aggregate information such as total daily revenue for each channel. Examples of third parties that use channels include Amazon and Google AdSense. In such scenarios, the number of channels is generally much smaller than the number of keywords whose value per click (VPC) we wish to learn. However, the advertiser has flexibility as to how to assign keywords to channels over time. We introduce the channelization problem: how do we adaptively assign keywords to channels over the course of multiple days to quickly obtain accurate VPC estimates of all keywords? We relate this problem to classical results in weighing design, devise new adaptive algorithms for this problem, and quantify the performance of these algorithms experimentally. Our results demonstrate that adaptive weighing designs that exploit statistics of term frequency, variability in VPCs across keywords, and flexible channel assignments over time provide the best estimators of keyword VPCs.