Abstract: In order to study the platform advertising strategy of merchants on e-commerce platform with membership programs, this paper establishes game models under two scenarios: one without platform advertising and the other with platform advertising through e-commerce platform membership. The reverse induction method and comparative analysis are used to identify the mechanism of merchants selecting a platform advertising strategy and the impact of the strategy on the decisions and profits of supply chain members. Results show that merchants should not adopt platform advertising if the membership discount is below a threshold, or if it exceeds a threshold while the commission rate remains low. If both membership discount and the commission rate exceeds their respective thresholds, introducing platform advertising is a "win-win" strategy for merchants and the platform from the perspectives of both profit and market share maximization. Platform advertising is always detrimental to nonmembers but can benefit members when the commission rate and the membership discount satisfy specific conditions. To ensure member rights and maintain the diversity of product categories with membership discounts, the platform should set membership discounts based on the commission rate for each product category.