Study On Mobile App Advertising Auction Based On Game Theory

Along with the development of the broadband wireless mobile telecommunication and applications on the Web, mobile electronic business has become another driving force for the development of the internet and provides a new promotional platform. More and more users play mobile games and buy goods using mobile App. It promotes the formation and development of mobile App advertising auction. Although mobile App advertising auction is similar to keyword auction, they have some significant differences. In sponsored search auction, there are only two participants-search engine and advertisers; In mobile App advertising auction, there are three participants, App developers, advertisers and mobile advertising platform. Moreover, in mobile App advertising auction, the quality and allocation of advertisement have more effect on the user experiences than sponsored search auction. Therefore, how to design optimal mechanism becomes an important issue in mobile App advertising auction. We make the following contributions to mobile App advertising auction.(1) Find and prove the optimal reserve price for this Laddered auction. We determine the reserve price under the condition that the click-through rate is separable and all advertisers are ranked by ranking scores. Moreover, we also show that telling the truthful value is the equilibrium strategy for each advertiser in Laddered auction.(2) Present a new optimal mechanism for mobile App advertising auction. We extend Garg’s work [4] by maximizing the revenue of the mobile advertising platform who acts as the mechanism designer and the bridge between the advertisers and the App developer. Furthermore, we propose that the hidden cost can be caused by poor user experience. To be closer to the actual situation, we extend Feng’s work [12] to make a convention that the valuations of a series of slots for one advertiser are ranked in order.(3) Examine how to design optimal aggregation platform mechanism for mobile advertising auction.In our new optimal aggregation platform mechanism, all platforms will be ranked from top to bottom according to filling rates. Moreover, all budget-limited advertisers will be allocated to certain slots in a feasible allocation and the revenue of auctioneer can be maximized.(4) Present the dominant bidding strategy for mobile advertising auction. Advertisers, in our paper, are ranked by the product of his/her bid and weight. We propose that multiple Nash Equilibriums also exist in mobile advertising auction. Moreover, our work takes the reserve price into account. This change may affect the dominant bidding strategy.