Media Selection with Yield Uncertainty

Justin Goodson (Saint Louis University, USA)

March 9, 2016 | 13h00-14h00 | Salle Von Neuman - Polytech Tours

Firms advertising a product or service seeking to maximize target audience exposure often face yield uncertainties, indeterminate future events resulting in bumped media spots. Yield may be affected by breaking news, natural disasters, or political events. Although advertisers may receive refunds for bumped spots, it is difficult to recover lost exposure. We consider optimization-based strategies to hedge against yield uncertainty, developing upper and lower bounds on the value of an optimal policy. Our work aims to guide practitioners by identifying situations where it may be beneficial to hold back a portion of the operating budget to dynamically respond to uncertainty.