Compare Ad-Insertion Strategies: Expected Ads and Probabilities

Q: Compare Ad-Insertion Strategies: Expected Ads and Probabilities

This question evaluates understanding of probability theory, expected value calculation, and stochastic modeling as applied to ad-insertion strategies in sequential data.

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Question

Newsfeed Ad-Insertion Strategies

You are evaluating two ways to insert ads into a user's newsfeed. Assume a user views a contiguous sequence of posts.

Strategies

Strategy A: Each post independently has a 4% chance (p = 0.04) of being an ad.
Strategy B: Exactly one ad is randomly inserted in every block of 25 posts (non-overlapping blocks).

Questions

Under Strategy A, what is the expected number of ads in 100 posts?
Under Strategy B, what is the (expected) number of ads in 100 posts? Compare to Strategy A.
Under Strategy A, what is the probability a user sees at least one ad in the next 25 posts?

Hint: Use linearity of expectation and binomial probabilities. P(at least one) = 1 − (1 − p)^n.

Compare Ad-Insertion Strategies: Expected Ads and Probabilities

Newsfeed Ad-Insertion Strategies

Strategies

Questions

Solution

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