Subject Business Operations Management

Question

1. Flowchart the information supply chain in the online advertising industry.
What is Break.com’s value proposition?

2. What challenges does Break.com face in managing its display advertising contracts?
Assuming that all contracts are identical and indivisible, with a $6.5 CPM and 10% make-good underdelivery penalty, determine how many impressions Break.com should contract on for its homepage during the second quarter of 2008.

3. How might Break.com implement revenue management, namely uses price differentiation?
Based on Exhibits 6 and 7, determine which advertising contracts are the most attractive to Break.com.

4. What are the implementation challenges and risks associated with revenue management in the online
display advertising industry.

Solution Preview

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1. With over 9 million monthly unique visitors online and still growing, as well as its ability to look, gather and purchase funny user-generated video content and games that appealed to young males, Break.com’s value proposition guarantees more impressions and higher sellouts level in terms of inventory through optimization of ad placements, featuring the right ads at the right time to its audience. This is to ensure that the targeted audience are exposed only to ads that are relevant to them....

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