An Advertiser-Centric Cooperative Mechanism in Smartphone Advertising Based on Stackelberg Game Analysis

Abstract

The popularity of smart phones has greatly promoted the development of mobile advertising, especially the development of mobile application (app) advertising. An ad network as a medium between advertisers and app developers can not only provide advertising services for advertisers, but also bring app developers incomes. Existing forms of advertising partnership between advertisers and advertising networks (ad networks) are generally centered on ad networks. However, the advertising-centric cooperation model sometimes cannot meet the specialized advertising needs of advertisers, and the advertisers have to spend more to find the suitable partners. In this paper, the authors consider the advertising problem from the perspective of advertisers. They design an advertiser-centric cooperative mechanism to help an advertiser to attract cooperation from ad networks. They formulate the advertiser-centric cooperative problem into a noncooperative game between an advertiser and a number of ad networks. It is proved that a unique Stackelberg equilibrium exists in the game and the authors have calculated the Nash equilibrium for each ad network. An algorithm that can achieve the unique equilibrium point is proposed. Extensive experiments' results are also conducted to verify the performance of the proposed mechanism in terms of the investment related factors.