The lack of a transparent mechanism makes the television advertising market in Taiwan extremely volatile to supply and demand changes. To resolve the problem, this study suggests a transparent and fair auction mechanism for the TV advertising market. A characteristic of television commercials is that there exists a synergy between time slots of commercials, i.e., it is more effective for advertisers to acquire some time slots together than just to obtain one of them. A combinatorial auction mechanism is proposed, which enables the advertisers to bid for a set of time slots simultaneously, thus avoiding the problem of losing any item in the bidder desired bundle. This study models the TV commercial combinatorial auction as an integer programming problem. One-month time slots of a TV channel in Taiwan are used in a computational experiment. The problem is solved by LINGO 12.0 and the resulting solutions provide a satisfactory allocation of time slots and maximize revenue for the TV station.
Research Journal of Applied Sciences, Engineering and Technology 4(20), pp.4105-4111