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Sharing Audience Data: Strategic Participation in Behavioral Advertising Networks

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  • Steven Schmeiser

    (Mount Holyoke College)

Abstract

I consider the incentives of special interest websites to participate in behavioral advertising intermediaries. Participation in the intermediary reveals valuable audience data and allows the intermediary to use those data to target the site’s audience on general interest websites—thus expanding the supply of impressions and decreasing average revenue per impression. I explore monopoly and duopoly settings and highlight the trade-off between sharing audience data and displaying higher-value ads, as well as the strategic interaction between sites serving the same advertising market. The model generates empirical predictions about the choice of intermediary technologies within advertising markets. I also find that higher concentration among special interest websites benefits consumer privacy.

Suggested Citation

  • Steven Schmeiser, 2018. "Sharing Audience Data: Strategic Participation in Behavioral Advertising Networks," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(3), pages 429-450, May.
    • Handle: RePEc:kap:revind:v:52:y:2018:i:3:d:10.1007_s11151-017-9605-9
    DOI: 10.1007/s11151-017-9605-9
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    References listed on IDEAS

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    1. Avi Goldfarb & Catherine E. Tucker, 2011. "Privacy Regulation and Online Advertising," Management Science, INFORMS, vol. 57(1), pages 57-71, January.
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    7. Tucker, Catherine E., 2012. "The economics of advertising and privacy," International Journal of Industrial Organization, Elsevier, vol. 30(3), pages 326-329.
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    Cited by:

    1. Lynne Pepall & Dan Richards, 2018. "Targeted Branding, Price Competition and Consumer Data," Discussion Papers Series, Department of Economics, Tufts University 0824, Department of Economics, Tufts University.

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