Activity-Based Advertising: Auctioning Advertising in Context

Internet advertising has seen tremendous revenue growth through its ability to effectively target consumer interest. However, it fails to reach consumers in as wide a range of activities as traditional advertising. This paper describes the opportunity for performing highly targeted activity-based advertising. By better representing human needs and activities, it will become possible to effectively target advertising in everyday situations. Critical to such systems’ success are the extension of advertising auctioning systems beyond keyword advertising. We outline the major challenges to such systems: identifying advertising opportunities and providing advertisers with a way to specify such opportunities, dealing with uncertainty in human behavior, and creating vigorous advertising markets.