IDEAS home Printed from https://ideas.repec.org/a/inm/orijoc/v31y2019i1p66-82.html
   My bibliography  Save this article

A New Approach to Real-Time Bidding in Online Advertisements: Auto Pricing Strategy

Author

Listed:
  • Shalinda Adikari

    (Department of Information Technology, University of Moratuwa, Moratuwa, Sri Lanka)

  • Kaushik Dutta

    (Muma College of Business, University of South Florida, Tampa, Florida 33647)

Abstract

Real-time bidding (RTB) for digital advertising is becoming the norm for improving advertisers’ campaigns. Unlike traditional advertising practices, in the process of RTB, the advertisement slots of a mobile application or a website are mapped to a particular advertiser through a real-time auction. The auction is triggered and is held for a few milliseconds after an application is launched. As one of the key components of the RTB ecosystem, the demand-side platform gives the advertisers a full pledge window to bid for available impressions. Because of the fast-growing market of mobile applications and websites, the selection of the most pertinent target audience for a particular advertiser is not a simple human-mediated process. The real-time programmatic approach has become popular instead. To address the complexity and dynamic nature of the RTB process, we propose an auto pricing strategy (APS) approach to determine the applications to bid for and their respective bid prices from the advertising agencies’ perspective. We apply the APS to actual RTB data and demonstrate how it outperforms the existing RTB approaches with a higher conversion rate for a lower target spend.

Suggested Citation

  • Shalinda Adikari & Kaushik Dutta, 2019. "A New Approach to Real-Time Bidding in Online Advertisements: Auto Pricing Strategy," INFORMS Journal on Computing, INFORMS, vol. 31(1), pages 66-82, February.
    • Handle: RePEc:inm:orijoc:v:31:y:2019:i:1:p:66-82
    DOI: 10.1287/ijoc.2018.0812
    as

    Download full text from publisher

    File URL: https://doi.org/10.1287/ijoc.2018.0812
    Download Restriction: no
    File URL: https://libkey.io/10.1287/ijoc.2018.0812?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jason Rhuggenaath & Alp Akcay & Yingqian Zhang & Uzay Kaymak, 2022. "Setting Reserve Prices in Second-Price Auctions with Unobserved Bids," INFORMS Journal on Computing, INFORMS, vol. 34(6), pages 2950-2967, November.
    2. Duan, Yongrui & Liu, Peng & Feng, Yixuan, 2022. "Pricing strategies of two-sided platforms considering privacy concerns," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    3. Chang-Yi Kao & Hao-En Chueh, 2022. "A Real-Time Bidding Gamification Service of Retailer Digital Transformation," SAGE Open, , vol. 12(2), pages 21582440221, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orijoc:v:31:y:2019:i:1:p:66-82. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.