De Liu, University of Kentucky

TitleOptimal Allocation for Internet Display Advertising

Time 2011-12-14 9:30-11:00 am

LocationWeilun 453Tsinghua SEM



The spread of real-time targeting technologies in mobile and Internet display advertising creates a new challenge: how to efficiently allocate countless categories of impressions in real time. We argue that existing options for allocating advertising impressions, namely via long-term guarantee contracts and real-time spot markets, are suboptimal. We propose a new “contingent contract” based approach, in which a seller can offer each ad buyer variable quantities contingent on the realized number of impressions. The key advantages of this approach include: (1) it accommodates a wide range of risk preferences, and (2) one can compute global optimal contingent contracts ahead of time to achieve better allocation efficiency and to simplify the allocation in real time. We solve the optimal contingent contracts first for a single type of impressions and then for multiple types of impressions. Utilizing a special structure of the multi-type problem, we show that it can be converted to single-type ones, thus allowing efficient computation of optimal contingent contracts.


De LIU is currently an associate professor in the Department of Information Systems at Gatton College of Business and Economics, University of Kentucky. His research interest includes the optimal design of IT-enabled mechanisms in electronic commerce and other business settings and his recent research topics include the design of auctions for Internet advertising, the design of contests for interactive digital entertainment and knowledge transfer mechanisms. Prof. Liu has published several papers on top journals like Journal of Marketing, Information Systems Research, etc.

He received the Ph.D. degree in Management Science and Information Systems from University of Texas at Austin (2004), and the B.E. (1998) and M.E. (2000) from Department of Management Science and Engineering, Tsinghua SEM.