Ad Exchange: Intention Driven Auction Mechanisms for Mediating Between Publishers and Advertisers

This paper concerns a scenario where sellers (i.e., publishers), who are willing to dedicate space on their Website to ads, and buyers (i.e., advertisers), are brought to a common, automatic marketplace. State of the art mechanisms exist for this ad-exchange scenario, however none of the previously proposed solutions fully take into account the preferences of the publishers. In this paper, we developed solutions for the case of multiple advertisers and multiple publishers, while considering the publishers´ preferences. We propose three truthful mechanisms: (i) the Hungarian VCG, (ii) the Simultaneous English Auction, and (iii) the Distributed Relocation Protocol. Each mechanism includes an allocation rule and a payment scheme. The Hungarian VCG achieves the optimal allocation, but it is not budget balanced, and it causes a deficit on the part of the ad exchange auctioneer. The other two mechanisms are heuristics, budget balanced, decentralized, avoid manipulations on the advertisers´ side, and simulations show that they reach near optimal solutions.