Exploring new mechanisms for demand-side platforms in real time bidding markets

Abstract

When online advertising met the big data technology, programmatic buying has become more and more popular, in which Real Time Bidding (RTB) is regarded as one of the most important formats of programmatic buying advertising. In RTB advertising markets, there is a two-stage auction process for each ad impression, in which Demand-Side Platforms (DSPs) adopt a two-stage resale model to get their revenues. Thus, for each DSP, how to design effective auction mechanisms in the two-stage auction process so as to get higher revenues for both itself and its advertisers has become a critical issue. This paper aims to study this issue, and propose a new bidding and pricing mechanism for the DSP. We also utilize the computational experiment approach to evaluate our proposed mechanism, and the experimental results show that our new mechanism can improve the revenues of both the DSP and the advertisers.