Exact and heuristic methods for personalized display advertising in virtual reality platforms

Kılıç, Kemal and Saygı, Menekşe Gizem and Sezer, Semih Onur (2019) Exact and heuristic methods for personalized display advertising in virtual reality platforms. Journal of Industrial and Management Optimization, 15 (2). pp. 833-854. ISSN 1547-5816 (Print) 1553-166X (Online)

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In this paper, motivated from a real problem faced by an online Virtual Reality (VR) platform provider, we study a personalized advertisement assignment problem. In this platform users log in/out and change their virtual locations. A number of advertisers are willing to pay for ad locations to reach these users. Every time a user visits a new location, the company displays one of the ads. At the end of a fixed time horizon, a reward is collected which depends on the number of ads of each advertiser displayed to different users. The objective is to assign ads dynamically to maximize the expected reward. The problem is studied in a framework where the behaviors of users are modeled with two-state continuous-time Markov processes. We describe two exact and four heuristic algorithms. We compare these algorithms and conduct a sensitivity analysis over problem and algorithm specific parameters. These are the main contributions of the current paper. Exact algorithms suffer from the curse of dimensionality, hence, heuristic methods might be considered instead in some cases. However, exact methods can also be used as part of heuristics since the experimental analysis demonstrates that they are robust for parameters that influence the computational requirements.
Item Type: Article
Uncontrolled Keywords: Stochastic optimization; Markov processes; dynamic programming; personalized advertisement; Virtual Reality
Subjects: Q Science > QA Mathematics > QA273-280 Probabilities. Mathematical statistics
Divisions: Faculty of Engineering and Natural Sciences > Academic programs > Industrial Engineering
Faculty of Engineering and Natural Sciences > Basic Sciences > Mathematics
Faculty of Engineering and Natural Sciences
Depositing User: Semih Onur Sezer
Date Deposited: 15 Feb 2019 15:40
Last Modified: 19 Jul 2023 15:06
URI: https://research.sabanciuniv.edu/id/eprint/36847

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