Allocation of advertising space by a web service provider using combinatorial auctions

Advertising is a critical process for promoting both products and services in global trade. Internet has emerged as a powerful medium for trade and commerce. Online advertising over the internet has increased more than hundredfold since 2001. In the present work, we address problems faced by online advertisement service providers. In this paper, we propose a multi-slot and multi-site combinatorial auction for allocating scarce advertisement slots available on multiple sites. We observe that combinatorial auctions serve as effective mechanisms for allocating advertising slots over the internet. We resort to “ant” systems (ant – social insect/intelligent agent) to solve the above NP-hard combinatorial optimization problem which involves winner-determination in multi-item and multi-unit combinatorial auctions.