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The Economics of the Online Advertising Industry

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  • Evans David S.

    ()
    (LECG)

Abstract

Internet-based technologies are revolutionizing the stodgy $625 billion global advertising industry. There are a number of public policy issues to consider. Will a single ad platform emerge or will several remain viable? What are the consequences of alternative market structures for a web economy that is increasingly based on selling eyeballs to advertisers? This article describes the online advertising industry. The industry is populated by a number of multi-sided platforms that facilitate connecting advertisers to viewers. Search-based advertising platforms, the most developed of these, have interesting economic features that result from the combination of keyword bidding by advertisers and single-homing.

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File URL: http://www.degruyter.com/view/j/rne.2008.7.3/rne.2008.7.3.1154/rne.2008.7.3.1154.xml?format=INT
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Bibliographic Info

Article provided by De Gruyter in its journal Review of Network Economics.

Volume (Year): 7 (2008)
Issue (Month): 3 (September)
Pages: 1-33

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Handle: RePEc:bpj:rneart:v:7:y:2008:i:3:n:2

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Web page: http://www.degruyter.com

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Cited by:
  1. Jörg Claussen & Tobias Kretschmer & Philip Mayrhofer, 2012. "Incentives for Quality over Time - The Case of Facebook Applications," CEP Discussion Papers dp1133, Centre for Economic Performance, LSE.
  2. Claussen, Jörg & Kretschmer, Tobias & Mayrhofer, Philip, 2010. "Private Regulation by Platform Operators – Implications for Usage Intensity," Discussion Papers in Business Administration 11374, University of Munich, Munich School of Management.
  3. Yoon Kiho, 2010. "Optimal Quality Scores in Sponsored Search Auctions: Full Extraction of Advertisers' Surplus," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-11, July.
  4. Yi Zhu & Kenneth C. Wilbur, 2008. "Strategic Bidding in Hybrid CPC/CPM Auctions," Working Papers 08-25, NET Institute, revised Oct 2008.
  5. Argenton, C. & Prüfer, J., 2012. "Search engine competition with network externalities," Open Access publications from Tilburg University urn:nbn:nl:ui:12-5117898, Tilburg University.
  6. David S. Evans, 2009. "The Online Advertising Industry: Economics, Evolution, and Privacy," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 37-60, Summer.
  7. Lai, Puqing, 2014. "Utilizing the access value of customers," Business Horizons, Elsevier, vol. 57(1), pages 61-71.

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