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Method of Utilizing Dynamic Progressive Revshare in a Video Advertisement Platform

IP.com Disclosure Number: IPCOM000241911D
Publication Date: 2015-Jun-08
Document File: 5 page(s) / 87K

Publishing Venue

The IP.com Prior Art Database

Related People

Hyunyoung Choi: INVENTOR [+7]

Abstract

A method for utilizing dynamic progressive revshare* in a video advertisement platform is disclosed. By utilizing the progressive revshare with price and pace to margin, an advertisement network maintains margin percentage goals of the advertisement network while benefiting from the positive margin impacts of a dynamic floor. The progressive revshare algorithm enables increased delivery and reaches the target margin percentage by pacing the margin towards the target margin ratio.

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Method of Utilizing Dynamic Progressive Revshare in a Video Advertisement Platform

Abstract

A method for utilizing dynamic progressive revshare* in a video advertisement platform is disclosed.  By utilizing the progressive revshare with price and pace to margin, an advertisement network maintains margin percentage goals of the advertisement network while benefiting from the positive margin impacts of a dynamic floor.  The progressive revshare algorithm enables increased delivery and reaches the target margin percentage by pacing the margin towards the target margin ratio.

Description

A dynamic floor is a well-known approach that allows an advertisement network to clear auctions below the floor when there is no bid at or above the floor.  Ultimately, the market is made more efficient and three parties in the market benefit.  The three parties are advertisers, publishers and advertisement network as the advertisers gain access to the inventory at a lower price, the publishers sell more inventories and the advertisement network gains additional margin.  While the dynamic floor guarantees the minimum revenue requirement to publishers, the ad network needs to concede margin percentage with the hope that margin increases as more inventory is sold at a lower price.  An algorithm enables mitigation against the drop in margin percentage.

Disclosed is a method and system for utilizing dynamic progressive revshare in a video advertisement platform.  By utilizing a progressive revshare with price and pace to margin, an advertisement network maintains margin percentage goals of the advertisement network while benefiting from the positive margin impacts of a dynamic floor.  The method offers a closed form solution, where an algorithm can easily be implemented without the complications of parameter estimation.  The progressive revshare algorithm enables increased delivery and reaches the target margin percentage by pacing the margin towards the target margin ratio.

Consider the case where a publisher requires a $6 floor and an advertisement network has a margin percentage goal of 25%.  The minimum price the advertisement network can clear the auction is $8 due to the margin goal of 25% (25% * $8 = $6).  A dynamic floor allows the advertisement network to clear auctions below $8 by accepting a margin goal less than 25%.  A progressive revshare, however, allows the advertisement network to hit the margin percentage goal while still increasing margin dollar.  To hit the 25% margin goal, a progressive revshare increases the margin rate when the auction is cleared above $8.  The method provides a pacing algorithm.  When the margin rate is below the margin goal (25% in the example) up to now, the progressive margin rate for the next time period is increased.  When the margin rate is above the margin goal up, the progressive margin rate is decreased for the next time period.  In time, the sum of the margin gap (delta) between expectation and reali...