Flexible Advertising Network Multi-Auction Segmentation

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Solution Overview

Problem

Current advertising networks struggle to accommodate advertisers with different value propositions, such as NIKE, WINZIP, and BOOKCLUB, as they require varying pricing models (CPM, CPC, and CPA) that are not easily managed, leading to inefficient ad campaign management and under/over-payment issues. Additionally, top-tier publishers face challenges in monetizing their brand value and advertisers cannot express preferences for specific publications or vertical segments effectively.

Innovation Solution

A flexible advertising network that allows advertisers to express their value propositions directly through various types of offers (impressions, selections, and conversions) using probabilities, enabling them to compete in auctions and target specific keywords, content, publications, or vertical categories, while maintaining control over data privacy and simplifying the user interface.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If the advertising network uses a single pricing model (e.g., CPC), then it can simplify the auction mechanism, but it cannot accommodate advertisers with different value propositions (e.g., CPM advertisers like NIKE, CPA advertisers like BOOKCLUB)

Engineering Contradiction:

Improveaccommodation of different advertiser value propositionsVSAvoidcomplexity of managing multiple pricing models

Core Design Contradiction:

Adaptability or versatilityVSDevice complexity

Solution Approach 1:

The patent segments the advertising network into multiple independent auction mechanisms, each dedicated to a specific pricing model (CPM auction, CPC auction, CPA auction). This allows each segment to operate with its own simplified rules while collectively serving diverse advertiser needs. Advertisers like NIKE can participate in CPM auctions, WINZIP in CPC auctions, and BOOKCLUB in CPA auctions, resolving the contradiction between versatility and complexity.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The patent creates a universal advertising network platform that performs multiple functions through its multi-auction architecture. The system simultaneously conducts CPM auctions for brand awareness campaigns, CPC auctions for click-driven campaigns, and CPA auctions for conversion-driven campaigns. This multi-functional design allows the network to accommodate different advertiser value propositions without requiring separate systems, thus achieving versatility while managing complexity through integration.

Inventive Principle:

Principle #6Universality (Multi-functionality)

2Adaptability or versatility

If the advertising network allows advertisers to express specific value propositions with different offer types, then it can improve advertiser satisfaction, but it increases the complexity of the auction mechanism and offer management

Engineering Contradiction:

Improveability to express different value propositionsVSAvoidease of managing offers

Core Design Contradiction:

Adaptability or versatilityVSEase of operation

Solution Approach 1:

The patent segments offer management into three distinct offer types corresponding to three pricing models: CPM offers (per thousand impressions), CPC offers (per click), and CPA offers (per conversion). Each offer type is managed within its dedicated auction mechanism, allowing advertisers to express their specific value propositions in the most appropriate format. This segmentation simplifies the user interface and management process for each advertiser while maintaining overall system versatility.

Inventive Principle:

Principle #1Segmentation

3Reliability

If the advertising network focuses on one type of value proposition (e.g., CPC), then it can optimize the auction for that model, but it causes under-payment or over-payment issues for advertisers with different value propositions

Engineering Contradiction:

Improveaccuracy of payment alignment with advertiser valueVSAvoidcomplexity of handling multiple value propositions

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent segments the payment and valuation process into three separate auction mechanisms, each optimized for its specific pricing model. CPM auctions accurately value impressions for brand advertisers, CPC auctions accurately value clicks for performance advertisers, and CPA auctions accurately value conversions for result-driven advertisers. This segmentation ensures that each advertiser pays accurately for what they value, eliminating under-payment and over-payment issues while maintaining reliability.

Inventive Principle:

Principle #1Segmentation

4Ease of operation

If the advertising network requires advertisers to convert their value propositions to a standard offer type, then it can simplify the auction mechanism, but it forces advertisers to frequently recalculate offers based on changing metrics like CTR

Engineering Contradiction:

Improvesimplicity of offer managementVSAvoidtime spent on offer recalculations

Core Design Contradiction:

Ease of operationVSLoss of time

Solution Approach 1:

The patent eliminates the need for offer conversion by segmenting the system into dedicated auction mechanisms for each pricing model. Advertisers submit offers in their native format (CPM offers remain as CPM, CPC offers remain as CPC, CPA offers remain as CPA) within their respective auction mechanisms. This segmentation removes the time-consuming recalculation process entirely, as advertisers no longer need to convert between pricing models or adjust offers based on changing CTR metrics.

Inventive Principle:

Principle #1Segmentation

5Measurement precision

If the advertising network uses human judgment to determine prices for top-tier publishers, then it can capture brand value, but it does not scale to allow purchase of ad spots across large networks

Engineering Contradiction:

Improveability to capture and monetize brand valueVSAvoidscalability of ad spot purchasing

Core Design Contradiction:

Measurement precisionVSProductivity

Solution Approach 1:

The patent replaces the mechanical system of human judgment and negotiation with automated electronic auction mechanisms. Top-tier publishers' brand value is captured through CPM auctions, where advertisers bid electronically for impressions on premium publications. This substitution of automated electronic auctions for human negotiation enables the system to scale across large networks of publishers while maintaining the ability to capture and monetize brand value accurately.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Data Source

PatentUS8326689B2Flexible advertising system which allows advertisers with different value propositions to express such value propositions to the advertising system

Publication Date: 2012.12.04 GOOGLE LLC

AI summary

Different advertisers that may have different value propositions and that may desire different types of ad spots may effectively participate in an advertising network. An advertiser may express various value propositions using various types of offers, such as offers (or maximum offers) per impression, selection, and/or conversion (or some other user event). Probabilities of events, associated with offers, occurring may be used to allow different advertisers with different value propositions to compete against one another in an arbitration such as an auction. Advertisers may target the serving of their ads to keywords (search and/or content), particular publications or properties, particular vertical categories, other types of ad spots, etc.