X hits on this document





48 / 98


higher volume-tiers. The development of DFP prices since 2003, divided into four volume-tiers shows that the decline in DFP prices remains pronounced when attention is restricted to a particular volume tier, such as the group of customers with a volume of 0 - 500m page impressions (the same is true whatever the tier considered). The drop in prices is therefore consistent with the intesity of competition.

  • 171.

    DoubleClick has been offering substantial discounts and short term contracts when negotiating renewals, rather than "locking" clients on long term contracts and fixed prices. Considering DoubleClick European customers at the point of renewal during the period from November 2006 to October 2007, divided into four volume tiers representing the range of small to large customers, the largest renewing publisher-side customers, with more than one billion monthly impressions, were on average offered a price reduction of [20-40%]*. The next largest tier of customers was offered a reduction of [30-50%]*, followed by [10- 30%]* and [30-50%]* for the third and fourth tiers respectively. The largest non- renewing publisher-side customers, with between 300 million and one billion monthly impressions, were on average offered a price reduction of [20-40%]*. The next largest tier of customers was offered a reduction of [5-20%]*, followed by [20-40%]* for the smallest tier. The largest publisher-side customers, who are already offered lower prices, received price reductions that were similar in proportion to smaller customers.

  • 172.

    For instance, before […]* announced its intention to move to Microsoft’s Atlas AdManager, DoubleClick actively sought to keep […]* business. In the most recent renewal negotiations, DoubleClick offered significant price reductions from the previous contract price of EUR […]* CPM, including an initial offer of EUR [approximately 24% lower]* effective CPM and a second offer of EUR [approximately 39% lower]* effective CPM after the client informed DoubleClick that it could save EUR […]* by moving to Microsoft’s Atlas AdManager. Other similar examples of bidding competition (with [5 customers]*) demonstrate that other ad serving companies have increased their competitive pressure on the market.


Both the evidence on switching and price reductions is consistent with the

fact that the majority of DoubleClick’s contracts in the Community have a duration of one to two years or less. The short duration of ad serving contracts enables customers to obtain lower prices through frequent renegotiations. Indeed, the fact that customers insist on short contract durations is evidence that they do not consider themselves to be susceptible to price increases at the point of renewal due to the presence of switching costs. This point is valid both for small and large publishers (arguably more susceptible to face high switching costs). For example, [4 large customers]* are customers with more than 1 billion impressions per month and 1-year contracts with DoubleClick while [4 large customers]* have contracts having a duration of two years105.

[4 customers]* were amongst DoubleClick's top 10 publisher-side customers in the EU in terms of 2006 revenues.


Document info
Document views113
Page views113
Page last viewedFri Oct 21 19:06:30 UTC 2016