Cost and participation models for exchange third-party integration in online advertising

A computer-implemented method for evaluating cost-based viability of a real-time, auction-based advertising system with third-party integration, the method comprising:

• executing the following steps by an exchange server that includes a processor and system memory:
• receiving a request for an advertisement (“ad”) bid from a publisher Web page;
• applying one or more business rules to determine a plurality of third-party entities who qualify to serve the advertisement;
• transmitting a plurality of requests for bids to the third-party entities;
• receiving at least one bid and corresponding advertisement from the third-party entities in response to the requests for bids;
• and
• selecting an advertisement based on the at least one bid and corresponding advertisement to deliver to the publisher Web page in real time;
• executing the following steps by a computer coupled with the exchange server, the computer including a processor and system memory:
• computing a plurality of valid paths from a plurality of publishers to and from the third-party entities through the exchange server;
• estimating a plurality of server and network costs, including fixed hardware costs and variable operational costs, amortized over a predetermined period of time, based on a number of average queries per second (QPS) transmitted at different portions of the valid paths;
• comparing current periodic fees paid by the plurality of third-party entities or their intermediaries to the plurality of amortized costs, to determine cost-based system viability;
• and
• determining updates, if needed, to the periodic fees based on the plurality of costs to maintain cost-based system viability.

A computer readable storage medium comprising a set of instructions, the set of instructions to direct a processor to perform the acts of:

• receiving, by an exchange server, a request for an advertisement (“ad”) bid from a publisher Web page;
• applying one or more business rules to determine a plurality of third-party entities that qualify to serve the advertisement;
• transmitting a plurality of requests for bids to the third-party entities;
• receiving at least one bid and corresponding advertisement from the third-party entities in response to the requests for bids;
• selecting an advertisement based on the at least one bid and corresponding advertisement to deliver to the publisher Web page in real time;
• computing a plurality of valid paths from a plurality of publishers to and from the third-party entities through the exchange server;
• estimating a plurality of server and network costs, including fixed hardware costs and variable operational costs, amortized over a predetermined period of time, based on a number of average queries per second (QPS) transmitted at different portions of the valid paths;
• comparing current periodic fees paid by the plurality of third-party entities to the plurality of amortized costs, to determine cost-based system viability;
• and
• determining updates, if needed, to the periodic fees based on the plurality of costs to maintain cost-based system viability.