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  Method and apparatus for automatic placement of advertisingUSPTO Application #: 20060089880Title: Method and apparatus for automatic placement of advertising Abstract: A computer system for automatic replacement of direct advertisements in scarce media includes an advertising server for selecting a direct advertisement based on certain criteria. Transaction results of the direct advertisement placement are reported back to the advertising server, and an associated accounting system. In one embodiment, the direct advertiser's server reports transactions back to the advertising server by email. In a second embodiment, a direct proxy server brokers the user's session (or interaction) with the direct advertiser's server, including transaction processing and the direct proxy server reports the results of transactions back to the advertising server and its associated accounting system. A direct proxy provides an independent audit of transactions at a remote direct advertiser's web site. The feedback of the results of direct advertisement transactions provides an efficient utilization of direct advertising space by way of an automated computer system with a predictive model for selection and distribution of direct advertising. (end of abstract) Agent: Kenyon & Kenyon LLP - Washington, DC, US Inventors: Dwight A. Merriman, Kevin O'Connor USPTO Applicaton #: 20060089880 - Class: 705014000 (USPTO) Related Patent Categories: Data Processing: Financial, Business Practice, Management, Or Cost/price Determination, Automated Electrical Financial Or Business Practice Or Management Arrangement, Distribution Or Redemption Of Coupon, Or Incentive Or Promotion Program The Patent Description & Claims data below is from USPTO Patent Application 20060089880. Brief Patent Description - Full Patent Description - Patent Application Claims
CROSS-REFERENCE TO RELATED APPLICATIONS [0001] This application is a continuation of U.S. patent application Ser. No. 09/094,949, filed on Jun. 15, 1998, pending, which claims the benefit under 35 U.S.C. .sctn. 119(e) of U.S. Provisional Application No. 60/048,940, filed on Jun. 16, 1997, and U.S. Provisional Application No. 60/049,877, filed on Jun. 17, 1997. U.S. patent application Ser. No. 09/094,949 is hereby incorporated by reference, as if repeated herein in its entirety, including the drawings. FIELD OF THE INVENTION [0002] This invention relates to computer systems for automated replacement of advertisements in scarce media. In particular, the present invention relates to the automated selection of direct advertising in advertising campaigns in order to utilize scarce media space efficiently and optimize revenue. BACKGROUND OF THE INVENTION [0003] Scarce media is defined as media providing limited amount of space. For example, newspaper and magazines have limited amount of page space; radio and television have a limited amount of air time slots; Internet web pages have limited amount of viewable screen space and/or bandwidth; and so on. Media providers (such as magazines and newspaper publishers, radio and television broadcasters, Internet content providers and advertising networks) commonly bill advertisers based on two prevalent pricing models. [0004] The first pricing model, based on the number of impressions delivered, is often referred to as "CPM" pricing (i.e. cost per thousand impressions). In CPM pricing, an advertiser pays a media provider a fixed amount based on the circulation of their advertisement, regardless of whether the advertising campaign is successful. [0005] The second pricing model, based on explicit customer feedback, is sometimes referred to as "Direct Response" or "CPA" advertising (i.e. cost per actions). CPA pricing is distinguished from CPM pricing, because in CPA pricing, a marketer compensates a media provider a variable amount based on the success of the advertising campaign. Successful ad campaigns are measured, for example, by the number of survey forms filled out, leads generated, sales transacted, software downloaded, and so on. [0006] Whereas in CPM pricing, an advertiser is entirely at risk for an unsuccessful advertising campaign, in the case of CPA pricing, the risk of an ad campaign's success is placed wholly on the media provider. It is therefore an important objective of media providers to select successful direct advertising campaigns in order to utilize scarce media space efficiently and optimize revenue. [0007] A significant economic problem exists for media providers billing on CPA models, wherein two or more direct advertisers wish to advertise on the same scarce space and only one can be accommodated. The media provides would normally prefer to allocate its space to direct advertisers so as to maximize revenue. A revenue maximizing strategy dictates that media providers allocate space to the most successful direct advertising campaign, however, successful campaigns are not known on a pro form a basis. Consequently, media providers are currently burdened with the task of estimating the performance of direct advertising campaigns. Selection of direct advertising, which is currently done in an ad hoc fashion, is usually a manual process. [0008] Further, current media allocations do not make reference to, or precisely measure, the "context" in which each direct advertisement performs best. Context is defined as the particular user to which the Advertisement is shown; and/or the particular date and/or time during which the Advertisement is displayed; and/or the particular "Division of Media" (a term defined below) in which the Advertisement is placed. Current selection of direct response advertising for CPA models is therefore highly inefficient and prone to error, often resulting in sub-optimal allocations of scarce media. Poorly performing direct advertisements represent a cost of opportunity and therefore an economic loss for the media provider. Conversely, better performing direct advertisements would generate more revenue and make better use of scarce media space. [0009] In summary, there is an important need for a method and apparatus for improved selection of direct response advertisements and more efficient utilization of scarce media in direct response advertising. SUMMARY OF THE INVENTION [0010] The present invention provides a method and apparatus for efficient utilization of direct advertising space in scarce media. An advertising server (also referred to herein as an advertisement server) selects a direct advertisement, based on certain criteria, for automatic replacement in scarce media. Transaction results of the direct advertisement placement are reported back to the advertising server. In one embodiment, the direct advertiser's server reports transactions back to the advertising server by email. In a second embodiment, a direct proxy server mirrors the direct advertiser's server, including transaction processing. The direct proxy server reports the results of transactions back to the advertising server (and associated accounting system) without requiring an email program modification of the remote direct advertiser's web site. The use of a direct proxy for reporting transactions provides an independent audit of transactions at the remote direct advertiser's web site. In either embodiment the feedback of the results of direct advertisement transactions is used to provide an efficient utilization of direct advertising space by way of an automated computer system with a predictive model. [0011] As used herein, the terms "advertising server" and "advertisement server" are used interchangeably to refer to a server that selects an advertisement for display to a user. The invention is embodied in an automated computer system with a predictive model that has any and/or all of the following process functionality: [0012] 1. Estimating the performance of particular direct advertisements using a predictive model [0013] 2. Selecting a direct advertisement or group of Advertisements that are estimated to perform optimally from a pool of direct advertisements [0014] 3. Delivering the selected direct advertisements to a medium (e.g. a web page or a newspaper) [0015] 4. Monitoring a feedback loop to determine if the user responded to the direct advertisement [0016] 5. Updating the predictive model based on the user's response [0017] 6. Calculating the actual performance of a particular Direct Response Advertisement after a statistically significant sampling period of user responses [0018] 7. Replacing poorly performing advertisements with those estimated to perform better [0019] 8. Repeating steps 1 to 7 above in an iterative process so that the media provider has exploited scarce media in an optimal manner [0020] 9. Providing reports and usage patterns to the advertiser and the media provider [0021] The present invention provides a method and apparatus for media providers to correlate particular advertisements with particular divisions of media space, so the media provider can further optimize scarce media space. Divisions of media space are, for example, individual pages of web sites; time slots for TV and radio commercials; sections of magazines and newspapers; and so on. [0022] The present invention provides a method and apparatus for media providers to correlate particular advertisements direct with particular users and groups of users of media, so the media provider can further optimize scarce media space. Users of media are, for example, browsers of web sites; viewers of television and CATV; listeners of radio; readers of magazines and newspapers; and so on). [0023] The present invention provides a method and apparatus for the automatic prevention of ad "burn out." Burn out is defined as the circumstance in which a viewer sees a particular advertisement, or a type of advertisement, too many times and is thereby desensitized to it, making it unlikely that he or she will respond. The same functionality for ad selection and targeting, as described in this invention disclosure, also alleviates user burn out. [0024] It is also an object of the present invention to provide a method and apparatus for the dynamic replacement of advertisements according to context (defined above). For example, advertisements for Christmas trees have been historically shown to perform well from late-November until December 24, whereas the same advertisements perform poorly other times of the year. The same functionality for ad selection and targeting, as described in this invention disclosure, also dynamically allocates advertisements according to Context. In this example, the media allocation based upon Context of a date would cause more Christmas tree advertisements to run from late-November until Christmas Eve, and then the system will shut off such ads. While the solution in foregoing simple example would normally be evident to a manual operator, the important feature is that in the present invention, the dynamic media allocation is automatic and does not require manual intervention. Other more subtle contexts, for which the present invention can dynamically allocate media include, but are not limited to, particular Users and Divisions of Media. [0025] While the preferred embodiment of this invention operates on an Internet advertising network, the invention is broadly applicable across any advertising system involving scarce media and customer feedback. Applicable advertising systems include, but are not limited to, direct mail, telemarketing, television, radio, print, and CATV, etc. BRIEF DESCRIPTION OF THE DRAWINGS [0026] FIG. 1 is a block diagram of a system for automatic placement of direct advertisements in accordance with the present invention. [0027] FIG. 2 is a flow chart diagram of the process for processing feedback transaction data for managing the placement of direct advertisements in accordance with the present invention. [0028] FIG. 3 is a flow chart diagram for selecting a direct advertisement based on various criteria in accordance with the present invention. Continue reading... Full patent description for Method and apparatus for automatic placement of advertising Brief Patent Description - Full Patent Description - Patent Application Claims Click on the above for other options relating to this Method and apparatus for automatic placement of advertising patent application. Patent Applications in related categories: 20080114652 - Apparatus and method for predicting the performance of a new internet advertising experiment - A computer readable storage medium has executable instructions to identify a new Internet advertising experiment including values. The effectiveness of the values in prior Internet advertising experiments is evaluated. 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