Presentation to the Merger Analysis in High-Tech Markets Conference, 2008. Robert W. Hahn, Senior Visiting Fellow, Smith School, Oxford, Hal J. Singer, Criterion Economics (currently President, Empiris, LLC).
In 2007, U.S. advertisers were expected for the first time to spend more on online advertising than on radio advertising. Source: eMarketer. U.S. online advertising revenues in 2007: were roughtly $17 billion, an increase of 35 percent over 2005 revenues. Source: Interactive Advertising Bureau. The Inputs to an Online Ad: Suppliers of online advertising provide three primary inputs: (1) ad tools, (2) intermediation, and (3) publisher tools. Ad tools: software packages that allow advertisers to manage inventory and produce ads. Intermediation: matching advertisers (buyers) to publishers (sellers) in an advertising marketplace: publishers, publishers’ direct sales forces, “ad networks networks” (resell publisher ad space), “ad exchanges exchanges” (match advertisers and publishers).