Research On Game Strategy Of In-app Advertising On Mobile Platform Based On Duopoly Competition Structure

Mobile platform systems carry a large number of apps that can be run,such as the two app system giants: Apple’s i OS system and its app store,and Google’s Android system and its app store.The popularity of mobile platform systems has accumulated a large number of app users,which has attracted the attention of traditional advertisers,which has given rise to in-app advertising.Mobile platforms have also changed from a traditional market structure with only app users to a bilateral market structure with both app users and advertisers,providing an interactive platform for app users and advertisers.Different from the duopoly advertising market of traditional media platform,the in-app duopoly advertising market of mobile platform exhibits two unique characteristics: the split structure of the mobile platform with a platform owner and two app developers jointly provide in-app advertising,and agency pricing for app sales.Considering in-app advertising,this paper analyzes a two-sided market model in which two app developers compete for advertisers and users under the split and integrated platform systems.For each platform system,the model is constrained by the behavior of competitors and in-app advertising.Our research has resulted in the following management insights and findings.Firstly,app developers don’t need to worry about competitors’ influence on in-app advertising strategies when making advertising decisions.Specifically,once the platform owner announces all the in-app ad prices and ad revenue share,no matter which strategy the competitor adopts,it will not affect the final advertising strategy result of another app developer,but will affect its app price.Interestingly,the equilibrium in-app advertising price for the platform owner is fixed,and the platform owner also use the advertising subsidy policy to limit the negative impact of in-app advertising on app developers.Additionally,when determining the optimal advertising subsidy strategy,the split platform will also comprehensively consider the profitability of the two app developers and the benefits of in-app advertising under duopoly competition,so as to implement the optimal integrated objective.Finally,compared with the integrated platform in traditional advertising,the model theoretically proves to improve the revenue of two app developers in the split platform.