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We have the pleasure to announce a lunch seminar with Remi Devaux, so block the date! May 5th at 12h30 in CERNA Meeting Room (Salle V401. You also find a ics-file attached for your outlook calendar, etc.
Remi will talk about Context matters: evidences from hotels and perfumes.
Online display advertising relies on a complex network of intermediaries between advertisers and publishers. Often, advertisers do not know the context in which their ads appear. Yet, recent evidences suggest the media environment generates externality on the advertising message.
We investigate how increased control over the advertising context affects advertising costs and effectiveness. Leveraging a database of +110.000 display ads run by notorious advertisers from the hotel and perfume industries, we identify two results. First, matching ads with website contents yields better returns and is cheaper than individual targeting. Second, private advertising markets — whereby publishers sell premium ads to selected advertisers — increase ad effectiveness. However, they generate two countervailing effects. On the one hand they crowd-out quality ads from the open market. On the other hand, they foster the presence of quality advertisers on the site which may generate positive externalities for the other ads. In certain circumstances, the co-existence of open and private advertising markets hence leads to adverse selection issues.