Professional Documents
Culture Documents
Submitted to
Professor Sreelata Jonnalagedda
Indian Institute of Management, Bangalore
For
Auction of Auctions Study in
Post Graduate Diploma in Management Program 2014-16
On
October 16, 2015
Sambit Rath
1411278
1411262
PGP 2014-16
PGP 2014-16
Objectives:
The key objectives of this CCS are,
1. Studying relationship between internal and external auctions.
2. Studying contemporary auction methodologies used in key industrial sectors with
a special focus on online advertisement platforms.
3. Analysis of the impact on auction revenues w.r.t choice of auction methodologies
(first price, second price etc.) in real-life market offerings.
4. Analysis of the impact on overall revenue from external auctions w.r.t choice of
auction methodology used in related (preceding) internal auction.
http://www.inmobi.com/company/news/inmobi-decoded-how-bangalore-based-firm-is-taking-on-google-andfacebook/
2
http://www.inmobi.com/company/current-openings/technology-team/jobid/79828
Maximize revenues
Optimize participation of relevant bidders
Aggregated trading platform that cannot be gamed
Minimize unsold inventory as these are perishable items
Bidder Perspective:
Maximize profit
Access to relevant products
Avoid creating seller monopolies
Common Objectives:
As part of this study the main objective of the auction will be assumed to be only
maximizing revenue.
InMobi, being the leading mobile advertising network in the emerging markets acquires
ad spot inventory through contractual purchases and ad exchange auctions. The
proportion of contractual purchases and more near term auctions normally depend upon
the estimated volatility of inventory pricing and availability.
InMobi traditionally determines the inventory bid value through internal auctions; this
suggests that InMobi doesnt treat these ad spots as common value objects but rather
private/hybrid value objects. InMobis choice of determining the final bid value of the ad
spots through internal auctions could be due to information asymmetry, asset synergies
etc. The choice of a second price auction model leaves each bidder with a dominant
strategy and hence is easier to manage. First price auctions on the other hand allow a
tradeoff between risk of losing Vs profit maximization but it requires much more in-depth
knowledge of all the bidders and their possible valuations to make an effective bidding
strategy.
The purpose of this study is to ascertain the best internal auction methodology to be
utilized for revenue maximization or can internal auctions be replaced by more effective
ulterior valuation methods.
Methodology:
Our CCS project would involve,
Primary research into understanding why InMobi feels the need for internal
auctions.
Primary & secondary research into understanding the impact of different auction
methodologies on the external auction revenues.
Exploratory analysis to uncover possible alternatives to internal auctions.
Critical analysis of the identified factors/data from primary, secondary and
exploratory research to understand relationships, implications and arrive at
logical conclusions.
Provide recommendations based on empirical research and analysis.
Planned Activity
Interim Report Submission
Schedule
Week 5
Jan 04, 2016
Week 11
Feb 29, 2016
Expected outcome:
The CCS project would identify optimal valuation ad spot methods for external bidding
processes for advertisement networks.
References:
Books
Articles