A Study on Ad-Place Quantity Optimization in AdWords Auction

Author

Zhang, Enxia

Author_Institution

Sch. of Inf. Manage. & Eng., Shanghai Univ. of Finance & Econ., Shanghai

fYear

2007

fDate

21-25 Sept. 2007

Firstpage

3339

Lastpage

3342

Abstract

Auction is a traditional and efficient mechanism for rare resource allocation, and it is one new strategy for Internet Search Engine providers to price their AdWords as well. However, the number of AdWords places can be infinte related to an AdWords due to Internet technology. As a result, supply often exceeds demand. It is a usual phenomenon that only one or two bidders participate in Goole or Baidu AdWords auction. This paper will analyze and compare the auctioneer´s expected revenue in Winner-pay auction and All-pay auction with complete information and asymmetric bidders. It is shown that the auctioneer gains a larger expected revenue in one Ad-place auction than in two Ad-places auction, and Winner-pay prefers to All-pay in one Ad-place auction. Accordingly, the Internet Search Engine provider had better choose one Ad-place auction and Winner-pay rule to obtain the most profit for the case of few bidders.

Keywords

Internet; advertising data processing; electronic commerce; pricing; search engines; AdWords auction; Internet search engine providers; Webpage advertisements; ad-place quantity optimization; all-pay auction; auctioneer expected revenue; pricing; winner-pay auction; Algorithm design and analysis; Databases; Electronic mail; Finance; Information analysis; Information management; Internet; Pricing; Resource management; Search engines;

fLanguage

English

Publisher

ieee

Conference_Titel

Wireless Communications, Networking and Mobile Computing, 2007. WiCom 2007. International Conference on

Conference_Location

Shanghai

Print_ISBN

978-1-4244-1311-9

Type

conf

DOI

10.1109/WICOM.2007.827

Filename

4340602