Mon 11/11
Omid Rafieian headshot

Seminar @ Cornell Tech: Omid Rafieian

Revenue-Optimal Dynamic Auctions for Adaptive Ad Sequencing

Digital publishers often use real-time auctions to allocate their advertising inventory. These auctions are designed with the assumption that advertising exposures within a user’s browsing or app-usage session are independent. Rafieian (2019) empirically documents the interdependence in the sequence of ads in mobile in-app advertising, and shows that dynamic sequencing of ads can improve the match between users and ads. In this paper, we examine the revenue gains from adopting a revenue-optimal dynamic auction to sequence ads. We propose a unified framework with two components – (1) a theoretical framework to derive the revenue-optimal dynamic auction that captures both advertisers’ strategic bidding and users’ ad response and app usage, and (2) an empirical framework that involves the structural estimation of advertisers’ click valuations as well as personalized estimation of users’ behavior using machine learning techniques. We apply our framework to large-scale data from the leading in-app ad-network of an Asian country. We document significant revenue gains from using the revenue-optimal dynamic auction compared to the revenue-optimal static auction. These gains stem from the improvement in the match between users and ads in the dynamic auction. The revenue-optimal dynamic auction also improves all key market outcomes, such as the total surplus, average advertisers’ surplus, and market concentration.

Speaker Bio

I am a Ph.D. candidate in quantitative marketing at the Foster School of Business, University of Washington. My research interests broadly encompass topics related to digital marketing, mobile advertising, personalization, and privacy. I examine these topics through two complementary lenses – (1) how can we utilize the recent advancements in machine learning to create value in digital marketplaces, and (2) how can we use theory-driven structural frameworks to study the marketing and economic implications of such developments.