On-line profit-maximization algorithms for managing sponsored content in cellular networks

Wireless Service Providers (SPs) typically generate revenue by offering various data plans to their users. Recently, SPs have been exploring another potential source of revenue by allowing Content Providers (CPs) to sponsor users´ requests for data. With this option, sometimes referred to as sponsored content, a CP can provide the requested content to the end user and compensate the SP for the service cost. The user benefits from free content without any charge to her data plan. This work considers an on-line setting in which sponsoring decisions are only made when end user requests for content are realized. Our objective is to maximize the combined profit of a given SP both from the users´ data plans as well as sponsored content. We consider the commonly offered data plans of fixed-quota. In the fixed-quota data plan, a user pays a fixed fee for the right to obtain a pre-determined amount of unsponsored content during each billing cycle (month). We show that for this data plan there is no on-line algorithm with bounded competitive ratio. However, by relaxing the requirements, an efficient on-line algorithm is introduced. Our simulations show the benefits of the proposed algorithm, which outperforms alternative solutions and provides near optimal profit for the SPs for various settings.