Revenue Models for Demand Side Platforms in Real Time Bidding Advertising

Real time bidding (RTB) has become an emerging online advertising with the development of Internet big data in recent years. In the whole RTB ecosystem, the Demand Side Platform (DSP) plays a central role, and it realizes the programmatic and accurate buying of the advertisements for the advertisers via a two-stage auction. In RTB business logics, DSP plays as an intermediary between the advertisers and the center platform. Due to the principle-agent relationship between the advertisers and the DSP, the DSP aims not only to maximize the revenue for the advertisers, but also gain its revenue in this process. So far there are two revenue modes for DSP, namely the two-stage resale model and the commission model, respectively. In this paper, we mainly consider the revenue model for DSP in RTB advertising market. We aim to study the properties of the two revenue models, and compare the revenues for the DSP and the advertisers under these two models. We also provide an example to illustrate our proposed models and their properties. The results show that under small ratio of the commission, the advertisers are more likely to choose the commission model, but the DSP is more likely to choose the two-stage resale model and set a larger weight, while under large ratio of the commission, the advertisers are more likely to choose the two-stage resale model, but the DSP is more likely to choose the commission model. Our research work highlights the importance of the revenue model on the revenues of the advertisers and the DSP, and is intended to provide a useful reference for DSPs in RTB advertising markets.