EXPRESS: Context Information can Increase Revenue in Online Display Advertising Auctions: Evidence from a Policy Change

Ad exchanges where real-time auctions for display ad impressions take place historically emphasized user targeting, and advertisers sometimes did not know which sites their ads would appear on, i.e., the ad context. More recently, some ad exchanges have been encouraging publishers to provide context information to ad buyers, allowing them to adjust their bids for ads at specific sites. This paper explores the empirical effect of a change in context information provided by a private European ad exchange. Analyzing this as a quasi-experiment using difference-in-differences, the authors find that average revenue per impression rose when the exchange provided subdomain information to ad buyers. Thus, ad context information is important to ad buyers, and they will act on it. Revenue per impression rises for nearly all sites, which is what is predicted by auction theory when rational buyers with heterogeneous preferences are given more information. The exception to this are sites with thin markets prior to the policy change; consistent with theory, these sites do not show a rise in prices. This paper adds evidence that ad exchanges with reputable publishers, particularly smaller volume, highquality sites, should provide ad buyers with context information, which can be done at almost no cost.

Smart Ads for Better User Targeting

Currently, there is a problem of contextual advertising. Advertisers want to be able to clearly target the audience because user experience and revenue depend on the relevance of the displayed ads. Today's technology makes it easier not only to collect a wealth of information but also to ensure that it accurately reflects on your target audience, industry, and ad campaigns. Contextual advertising supports much of the web's ecosystem today online but not offline. The task was to develop a system prototype and scale it, which gives the ability to display advertising based on user interests in real life based on the best techniques of contextual advertising.