Inefficiencies in Digital Advertising Markets
Published in Journal of Marketing, 2021
Digital advertising is a large and rapidly growing industry, but there is growing concern about its efficiency. This article identifies and discusses several key sources of inefficiency in digital advertising markets, including measurement difficulties, misalignment of incentives, and market power. We review the academic literature on these topics and provide a framework for understanding how these frictions can lead to suboptimal outcomes for advertisers, publishers, and consumers. We also discuss potential solutions and highlight promising areas for future research that can help improve the efficiency and transparency of these markets.
Recommended citation: Gordon, B. R., Jerath, K., Katona, Z., Narayanan, S., Shin, J., & Wilbur, K. C. (2021). "Inefficiencies in Digital Advertising Markets." Journal of Marketing. 85(1), 7-25.
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