The Online Data Collection & Targeting Economy: Price Increases Will Affect Reach and Content Diversity

We suggest that the Google takeover of Doubleclick, Microsoft’s aQuantive deal, and related acquisitions will have important ramifications to competition and civil society. Powerful business economics will shape the online medium (mobile, PC, IPTV), potentially diminishing content diversity. We are especially concerned about the future of political campaigns, as one’s ability to access voters and inform the public will be determined–as with TV today–but one’s deep pocketbook. So we find this quote from a Wharton economics professor of interest: “Xavier Drèze, a marketing professor at Wharton, suggests that online advertising prices could increase due to better targeting. “The more targeted the ads, the more valuable they are.”

The Wharton piece goes on, citing a recent report by Susquehanna Financial Group analyst Marianne Wolk.

“Behavioral targeting makes inventory available for sale based on the value of a web site’s audience, generally outstripping the value of the content on a page,” Wolk writes. “Behavioral advertising enables marketers to reach beyond keywords and impressions to the audience segments behind them.”

The Wharton article explains that “[]If Wolk’s assessment plays out, advertisers are likely to have a variety of media to spur behavior. For instance, a television ad could elicit an emotional response from a consumer that then prompts him or her to do a search and ultimately make a purchase. The big difference in the brave new world of advertising is that all of these moves would be tracked.

Author: jeff

Jeff Chester is executive director of the Center for Digital Democracy. A former journalist and filmmaker, Jeff's book on U.S. electronic media politics, entitled "Digital Destiny: New Media and the Future of Democracy" was published by The New Press in January 2007. He is now working on a new book about interactive advertising and the public interest.

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