OR PRACTICE---Scheduling of Dynamic In-Game Advertising

John Turner (), Alan Scheller-Wolf () and Sridhar Tayur ()
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John Turner: The Paul Merage School of Business, University of California, Irvine, Irvine, California 92697
Alan Scheller-Wolf: Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213
Sridhar Tayur: Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213

Operations Research, 2011, vol. 59, issue 1, 1-16

Abstract: Dynamic in-game advertising is a new form of advertising in which ads are served to video game consoles in real time over the Internet. We present a model for the in-game ad-scheduling problem faced by Massive Inc., a wholly owned subsidiary of Microsoft, and a leading global network provider of in-game ad space. Our model has two components: (1) a linear program (solved periodically) establishes target service rates, and (2) a real-time packing heuristic (run whenever a player enters a new level) tracks these service rates. We benchmark our model against Massive's legacy algorithm: When tested on historical data, we observe (1) an 80%--87% reduction in make-good costs (depending on forecast accuracy), and (2) a shift in the age distribution of served ad space, leaving more premium inventory open for future sales. As a result of our work, Massive has increased the number of unique individuals that see each campaign by, on average, 26% per week and achieved 33% smoother campaign delivery as measured by standard deviation of hourly impressions served.

Keywords: dynamic in-game advertising; video game advertising; display advertising; revenue management; linear programming; goal programming (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (6)

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