From Mad Men to Maths Men: Concentration and Buyer Power in Online Advertising

For search engine giants like Google, advertising is their primary source of profits. This paper explores what happens to these profits when advertisers let intermediary companies bid in ad auctions on their behalf. The authors discuss strategies that intermediaries employ to distort and coordinate bids. Using a novel market definition and approach to analyzing intermediary concentration, the authors show that intermediaries may be powerful countervailing forces against Google’s market dominance.