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number of publishers that sell their ad space to advertisers. Today, roughly 60- 75% of all display ad space is sold directly and 25-40% is sold through i n t e r m e d i a t i o n 3 2 . H o w e v e r , t h e m a r k e t s h o w s a t r e n d t o w a r d s a n i n c r e a s e o f i n t e r m e d i a t i o n 3 3 , p a r t l y r e s u l t i n g f r o m i m p r o v e d t a r g e t i n g t e c h n o l o g y l e a d i better monetization of the inventory. n g t o



    • 6.1.

      Relevant product markets

      • 6.1.1.

        Provision of online advertising space Offline and online advertising

    • 44.

      The notifying party submits that the relevant product market should encompass

the provision of advertising space in all types of media. In this market, publishers are the selling side, whereas advertisers are the buying side. Notably, in the notifying party's view the internet would be just one of the several media channels - among which TV, newspapers, etc. - that can be chosen by advertisers wanting to promote their goods or services. From a demand-side perspective, advertisers would therefore take all media into account when planning their advertising campaigns. Some substitutability among media would be demonstrated through the growth experienced by online advertising in recent years34, partially at the expenses of other advertising media ("offline advertising"). From a supply-side perspective, this comprehensive definition would be justified by the fact that traditional media publishers as well as major newspapers and magazines offer both online and offline advertising space.

45. This broad market definition cannot be accepted, primarily because the market investigation revealed that offline and online advertising are perceived as separate markets by the majority of respondents. Furthermore, online advertising is used for specific purposes. As opposed to offline advertising, online advertising is considered to be capable of reaching a more targeted audience in a more effective way. Advertisers can precisely target their audience by combining information regarding geographical location, time of day, areas of interest, previous purchasing record of the user and search preferences. This option is not available in the case of offline advertising, for which the amount of "wasted


Source: party's estimate and Online Advertising Networks 2007 – A Buyer's Guide (e-consultancy). In the United Kingdom, direct sales by publishers are estimated to account for around 75% of overall online display advertising spending (25% for ad networks and exchanges). This is also consistent with the 30% estimate for intermediation provided by a third party's economic consultant. Yet while the value of intermediated sales seems relatively low, it is worth noting that directly sold inventory is usually premium and therefore commands higher prices. Thus, the share of ad impressions sold through intermediaries is likely to be much higher (estimated at more than 50% by Microsoft's economic consultant).


According to the parties, intermediation only represented 14% of total non-search ads in 2004.


See Zenith Optimedia Report March 2007.


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