Internet Advertising

Résumé du livre

According to competition authorities, advertisements shown on different media are specific and complementary goods. This means that TV advertisements are not substitutable by print or radio advertisements. Keeping with this view, competition authorities consider that Internet advertising is a market onto itself. The Internet medium does not compete with advertising markets for print, television or radio. However, this view point no longer stands.Advertisers use two criteria to value advertising medium: 1) reach, or the number of prospects which may see the ad, and 2) targeting, the socio-economic quality of these prospects. The positive network externalities linked with « Winner takes all » are at the root of the Internet's reach. Internet targeting depends on collecting and handling individual data and placing them on their social graph. Mass targeting yields incomparable power and creates the competitive advantage of the Internet compared to traditional advertising mediums. This explains why the Internet is becoming the world's leading advertising medium, upending television. The Internet is irreversibly substituting all traditional advertising media.The Internet's value as an advertising medium depends directly on the quantity of data stored and its data management capacity: both are capitalistic businesses. The relationship between the quantity of data and the value of advertising capacity, explains why the advertising market's supply is so concentrated, and currently in a duopolization process.The Internet's increasing dominance on the advertising market and the high concentration on the supply side requires the antitrust authorities' attention on the advertising, content production and publishing markets.