Pricing display ads and contextual ads: Competition, acquisition, and investment

Yung-Ming Li*, Jhih Hua Jhang-Li

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

Most websites are simultaneously supported by display advertising and contextual advertising. In this paper, we develop an economic model to examine the profitability of these two ad types in both a monopolistic market and duopolistic market, identifying the influence of impression benefit and click benefit. We find that in the duopolistic market a rival channel's professional ability to enhance a visitor's impression is beneficial to the channel offering contextual advertising. We also find that the strength of a search engine is limited in the duopolistic market; therefore, acquisition becomes a prime strategy to reveal the value of contextual advertising.

Original languageEnglish
Pages (from-to)16-27
Number of pages12
JournalElectronic Commerce Research and Applications
Volume8
Issue number1
DOIs
StatePublished - 1 Jan 2009

Keywords

  • Contextual advertising
  • Display advertising
  • Multimedia technology
  • Pricing
  • Search engine

Fingerprint Dive into the research topics of 'Pricing display ads and contextual ads: Competition, acquisition, and investment'. Together they form a unique fingerprint.

Cite this