Context Information Can Increase Revenue in Online Display Advertising Auctions: Evidence from a Policy Change

Sila Ada, Nadia Abou Nabout, Elea McDonnell Feit

Publication: Scientific journalJournal articlepeer-review


Ad exchanges, where real-time auctions for display ad impressions take place, have historically emphasized user targeting, and
advertisers sometimes did not know on which sites their ads would appear; in other words, they had no ad context. More
recently, some ad exchanges have been encouraging publishers to provide context information to ad buyers that would allow
them to adjust their bids for ads at specific sites. This article explores the empirical effect of a change in context information
provided by a private European ad exchange. Analyzing this as a quasi-experiment using difference in differences, the authors
find that average revenue per impression rose when the exchange provided subdomain information to ad buyers. Thus, ad context
information is important to ad buyers, and they will act on it. Revenue per impression rises for nearly all sites, which is what
auction theory predicts will happen when rational buyers with heterogeneous preferences are given more information.
Exceptions are sites with thin markets prior to the policy change; consistent with theory, these sites do not show a rise in prices.
This study adds evidence that ad exchanges with reputable publishers, particularly smaller volume, high-quality sites, should provide
ad buyers with context information, which can be done at almost no cost.
Original languageEnglish
Pages (from-to)1040-1058
JournalJournal of Marketing Research
Issue number5
Publication statusPublished - 2022

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 502019 Marketing

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