Author(s)
Avi Goldfarb and
Catherine Tucker
Source
NET Institute Working Paper #07-23, 2007
Summary
This paper considers competition in online advertising markets.
Policy Relevance
Google is merging with its competitor Doubleclick, potentially raising issues under competition law. However, if different types of advertising compete with one another, there might be more competitors in advertising that it first appears. Our papers uses an experiment with lawsuit-related keywords to look at online ads competing with more direct marketing.
Main Points
- Lawyers who are banned from “ambulance-chasing” can contact potential clients in some states, but not in others.
- In states with a ban, search engines like Google can charge slightly more for advertising.
- This suggests that different types of advertising like online ads and more direct marketing compete with one another.
- In assessing competition in online advertising markets, it makes sense to use a broad market definition that includes several types of advertising.