research-article

Ad Auction Design with Coupon-Dependent Conversion Rate in the Auto-bidding World

Authors:

Pingzhong Tang,

Zhe MaAuthors Info & Claims

WWW '23: Proceedings of the ACM Web Conference 2023

Pages 3417 - 3427

https://doi.org/10.1145/3543507.3583230

Published: 30 April 2023 Publication History

Abstract

Online advertising has become a dominant source of revenue of the Internet. In classic auction theory, only the auctioneer (i.e., the platform) and buyers (i.e., the advertisers) are involved, while the advertising audiences are ignored. For ecommerce advertising, however, the platform can provide coupons for the advertising audiences and nudge them into purchasing more products at lower prices (e.g., 2 dollars off the regular price). Such promotions can lead to an increase in amount and value of purchases. In this paper, we jointly design the coupon value computation, slot allocation, and payment of online advertising in an auto-bidding world. Firstly, we propose the auction mechanism, named CFA-auction (i.e., Coupon-For-the-Audiences-auction), which takes advertising audiences into account in the auction design. We prove the existence of pacing equilibrium, and show that CFA-auction satisfies the IC (incentive compatibility), IR (individual rationality) constraints. Then, we study the optimality of CFA-auction, and prove it can maintain an approximation of the optimal. Finally, experimental evaluation results on both offline dataset as well as online A/B test demonstrate the effectiveness of CFA-auction.

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Cited By

Liu XFan ZDing YGuo YZhang LLi CKong DLi HShen WLarson K(2024)Optimal auction design with user coupons in advertising systemsProceedings of the Thirty-Third International Joint Conference on Artificial Intelligence10.24963/ijcai.2024/322(2904-2912)Online publication date: 3-Aug-2024
https://dl.acm.org/doi/10.24963/ijcai.2024/322
Liaw CMehta AZhu WChua TNgo CKa-Wei Lee RKumar RLauw H(2024)Efficiency of Non-Truthful Auctions in Auto-bidding with Budget ConstraintsProceedings of the ACM Web Conference 202410.1145/3589334.3645636(223-234)Online publication date: 13-May-2024
https://dl.acm.org/doi/10.1145/3589334.3645636

Index Terms

Ad Auction Design with Coupon-Dependent Conversion Rate in the Auto-bidding World
1. Information systems
  1. Information systems applications
    1. Computational advertising
2. Theory of computation
  1. Theory and algorithms for application domains
    1. Algorithmic game theory and mechanism design

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cover image ACM Conferences

WWW '23: Proceedings of the ACM Web Conference 2023

April 2023

4293 pages

ISBN:9781450394161

DOI:10.1145/3543507

Copyright © 2023 ACM.

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Publication History

Published: 30 April 2023

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National Key Research and Development Program of China
National Natural Science Foundation of China

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WWW '23

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WWW '23: The ACM Web Conference 2023

April 30 - May 4, 2023

TX, Austin, USA

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Cited By

Liu XFan ZDing YGuo YZhang LLi CKong DLi HShen WLarson K(2024)Optimal auction design with user coupons in advertising systemsProceedings of the Thirty-Third International Joint Conference on Artificial Intelligence10.24963/ijcai.2024/322(2904-2912)Online publication date: 3-Aug-2024
https://dl.acm.org/doi/10.24963/ijcai.2024/322
Liaw CMehta AZhu WChua TNgo CKa-Wei Lee RKumar RLauw H(2024)Efficiency of Non-Truthful Auctions in Auto-bidding with Budget ConstraintsProceedings of the ACM Web Conference 202410.1145/3589334.3645636(223-234)Online publication date: 13-May-2024
https://dl.acm.org/doi/10.1145/3589334.3645636

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