EFFICIENT AUCTION MECHANISMS FOR MOBILE ADS

The Mobile Ad. Ecosystem

Ad Inventory

Different Auction Mechanisms

Vickrey Auctions

First price sealed bid auction

Key Parameters

Real Time Bidding

Challenges

Agenda

Why Mobile Ads?

Source: http://techcrunch.com/tag/mobile-advertising/

And

The whole biz Model is based on auctioningMobile Ad

space!

The Mobile Advertising ecosystem

AD.

EXCHANGE

AD.

EXCHANGE

2

Advertisers

Apps (Users)Ad Servers

That track users

With/Without

Cookies

INTERMEDIARIES

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EXCHANGE

AD.

EXCHANGE

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AD AGGREGATORS AUCTIONEERS TARGET MARKET

Ad Networks

That aggregate

Demand

The Mobile Ad. Inventory

InterstitialsExtended BannersInteractive BannerFloating Banners

Types of Mobile Ad Auctions

VickreyauctionsPre-awardauctions(PRE)Post-awardauctions(POST)

Firstpricesealedbidauction(FPSB)RealTimeBidding

1. Reserve Price2. Reserve Price

3. Bid prices 4. Bid prices

Au

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Ad

Exchanges/

Ad Servers

Ad Networks

Au

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Bid

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Buyers

Bid

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5. Winner awarded6. Winner awarded

7. Buyer pays 8. Intermediary pays

Bidding Auctions

* Direct bidding

by buyers

Key Parameters that influenceClickThe act of clicking on an ad (banner or text link) that has been served to a mobile screen.

Click-ThroughThe act of clicking on a banner or text link ad, which takes the user through to

Used as a counterpoint to impressions to judge the response-inducing power of the ad.

Click-Through-Rate (CTR) or Response rate

Expressed as a percentage and calculated by taking the number of clickthroughsthe ad received, dividing that number by the number of impressions and multiplying by 100 to obtain a percentage:

Example: 20 clicks / 1,000 impressions = .02 x 100 = 2% CTR.

.

Key Parameters that influence

CPM (Cost Per Mille, Cost Per Thousand)

The price paid by an advertiser for a site displaying their ad 1,000 times.

Cost per Click (CPC) The price paid by an advertiser for a single click on its ad that

brings the end user to its intended destination.

eCPMA useful reporting metric for measuring revenue generated across various marketing channels, eCPM or effective cost per thousand impressions is calculated by dividing total earnings by the total number of impressions in thousands.

Example:, if a publisher earns US$200 from 40,000 impressions, the eCPM calculation would be (US$200/40,000) x1000 giving an eCPM of US$5.00.

Key Parameters that influence

eCPC

eCPCis the effective cost of each click, calculated by dividing total earnings by the total number of clicks.

Fill Rate

The percentage of ad requests that are filled with ads (that is, where an ad is displayed to the end user). Impression An impression is generated every time an end user views an ad.

RPM

RPM or Revenue Per Mille is the earning (estimated earnings) you will get for every 1000 impression. Where CPM is the cost of ads for 1000 ad impressions to advertiser, RPM is the revenue for publisher from 1000 impressions. RPM is calculated by dividing your possible estimated earnings by the number of page views, impressions, or queries you received, which is then multiplied by 1000.

Efficient Auction mechanisms for Mobile Ads

For : Ad Exchanges/Supply side platforms

Optimal reserve price of Ad exchange depends both on the number of ad networks and Advertisers/Publishers per ad networks.

Optimal Reserve price increases with increase in number of advertisers/publisher and ad networks participating in the auction

For : Ad Networks/Demand side platforms

First-price sealed-bid auctions (FPSB) seem to provide a good trade-off between revenue and efficiency.

Ad Networks shall find FPSBs better than the other two auctions

For : Advertisers/Publishers

For a non-captive advertiser/publisher, Post-award Vickrey auctions are preferred.

For captive buyers, Pre-award Vickrey auctions are preferred

Pre-award Vickrey auctions yield lower social welfare than the other auctions