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Digital Ecosystems, the Adtech Tax and Content Quality

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Abstract

The adtech industry plays a key role in connecting digital publishers and advertisers. This industry is dominated by integrated ecosystems. We study how integration between an adtech intermediary and a major digital publisher affects the ad market and content production. Integration enables the intermediary to leverage exclusive access to data to monopolize the intermediation market and inflate the adtech taxon independent publishers. This depresses investment in content by independent publishers, but boosts the integrated firm’s investment. The net impact of integration on consumer surplus and welfare depends on which effect prevails. Prohibiting data sharing between firms within the ecosystem is not sufficient to restore the market outcome under vertical separation.

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  • Anna D’Annunzio & Antonio Russo, 2025. "Digital Ecosystems, the Adtech Tax and Content Quality," CSEF Working Papers 758, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    • Handle: RePEc:sef:csefwp:758
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    1. Anna D’Annunzio & Antonio Russo, 2020. "Ad Networks and Consumer Tracking," Management Science, INFORMS, vol. 66(11), pages 5040-5058, November.
    2. Oliver Latham & Mikaël Hervé & Romain Bizet, 2021. "Antitrust concerns in Ad-Tech: formalizing the combined effect of multiple conducts and behaviours," European Competition Journal, Taylor & Francis Journals, vol. 17(2), pages 353-390, May.
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    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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