Networks
The Generalized Second Bid is interesting, and something we learned in class. However, can it be applied to ad space?
When utilizing a search engine, you have ad space that ultimately contributes to the majority of “google’s” revenue. GSP is used to price and select the ads for whatever page for whatever search engine. In this case, it is a very simple sorting method. We have all of our ads and then we rank them by decreasing bid. This allows for the highest bid to pay the second highest price and then be sponsored. However, as ads and ad space becomes more and more complicated this tends to introduce problems. For example, ad size and ad resolution are things that are not accounted for using this method.
The newer method is called VCG. This is called a “truthful method”. This allows for a plethora of complex situations that can be accounted for and added to represent a “true value bid”. As, ultimately, even though the GSB is supposed to show true value, in the world of ADs this proves to not follow what we’ve learned in class.
https://www.microsoft.com/en-us/research/wp-content/uploads/2016/06/mdmp-1.pdf