Revenue Maximization in Incentivized Social Advertising

TL;DR

This paper models revenue maximization in incentivized social advertising as a complex submodular optimization problem, proposing scalable greedy algorithms with provable guarantees to optimize ad placement and incentives.

Contribution

It formulates the incentivized social advertising revenue maximization as a submodular optimization problem with novel constraints and provides scalable algorithms with theoretical guarantees.

Findings

Proposed greedy algorithms with approximation guarantees.

Established the problem's NP-hardness.

Developed scalable influence estimation techniques.

Abstract

Incentivized social advertising, an emerging marketing model, provides monetization opportunities not only to the owners of the social networking platforms but also to their influential users by offering a "cut" on the advertising revenue. We consider a social network (the host) that sells ad-engagements to advertisers by inserting their ads, in the form of promoted posts, into the feeds of carefully selected "initial endorsers" or seed users: these users receive monetary incentives in exchange for their endorsements. The endorsements help propagate the ads to the feeds of their followers. In this context, the problem for the host is is to allocate ads to influential users, taking into account the propensity of ads for viral propagation, and carefully apportioning the monetary budget of each of the advertisers between incentives to influential users and ad-engagement costs, with the rational goal of maximizing its own revenue. We consider a monetary incentive for the influential users, which is proportional to their influence potential. We show that revenue maximization in incentivized social advertising corresponds to the problem of monotone submodular function maximization, subject to a partition matroid constraint on the ads-to-seeds allocation, and submodular knapsack constraints on the advertisers' budgets. This problem is NP-hard and we devise 2 greedy algorithms with provable approximation guarantees, which differ in their sensitivity to seed user incentive costs. Our approximation algorithms require repeatedly estimating the expected marginal gain in revenue as well as in advertiser payment. By exploiting a connection to the recent advances made in scalable estimation of expected influence spread, we devise efficient and scalable versions of the greedy algorithms.