EFL Jour Fixe: Marc Heise
Title: Determinants of Prices for Display Advertising paid by the Financial Industry
Speaker: Marc Heise, E-Finance Lab
Abstract: Banks are among the companies that pay the highest prices in online advertising. In real-time advertising (RTA), each unit of online advertising inventory is traded in real-time on advertising exchanges. It shares many characteristics with stock market exchanges. An important difference, however, is that each unit of the online advertising inventory can have a different value for each advertiser.
Publishers as the sellers of online advertising inventory can influence the value that each advertiser assigns to each inventory unit by disclosing a different amount of information. An important question for the publisher is how much information to release. Too little information leads to low prices because the advertiser cannot evaluate the value of the inventory. Too much information, however, might also yield to lower prices because the advertiser might recognize that the inventory does not match his needs.
The aim of this article thus is to understand the implications of information disclosure on publishers' profit. Based on auction data from a leading German sales house for ad inventory, we analyze how different levels of information disclosure as well as the kind of information disclosed impact the price for an inventory unit.