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However, in view of the evidence on switching costs and the degree of

competition on ad serving tools, this seems rather unlikely.


With respect to ad networks, ad serving tools are a key input154

. However,

while ad networks also use third-party ad serving tools (and could switch if the price of DPF or DFA was to increase), they also have a greater tendency to develop their own in-house technology as illustrated by the examples outlined in paragraphs 176-177. Indeed, both large and small ad networks have developed their in-house ad serving tools such as Edintorni, Ligatus, ValueClick, Quigo, BlueLithium/Right Media, Advertising.com, ad pepper or WPP (for the publisher-side). There are examples of ad networks and ad exchanges having switched ad serving provider such as […]* that switched from OpenAds to DoubleClick or […]* that moved from DoubleClick to Atlas. The ad network ad pepper indicated that they switched "several times" before developing their in- house solution (in 2007). The ability to foreclose ad networks by either refusing to sell DoubleClick tools to ad networks or increasing the price of these tools when sold to ad networks will therefore also depend on whether ad networks have other alternatives. In view of the evidence on switching costs and the degree of competition on ad serving tools, it can be concluded that ad networks would have alternatives to the parties' ad serving tools.


In the absence of significant switching costs and in view of the possibility to

switch to alternative suppliers develop in-house solutions), appears to be rather limited.

of the

ad serving ability of

tools (including the possibility to input foreclosure therefore also

  • 302.

    The presence of network effects would also be another crucial ingredient of the theories of harm. Indeed, if the merged entity was able to attract customers to its own intermediation platform through lower DFP prices when used with AdSense or bundling (or other strategies), the ability to foreclose could be reinforced by the presence of network externalities as competitors might be deprived from a sufficiently large customer base (that is to say from sufficient "liquidity") or from the benefit of direct network externalities or in other words, from the access to superior CPI allowing of the improvement of targeting.

  • 303.

    One third-party complainant has put forward the presence of direct network effects which would give the new entity a comparative advantage, difficult to replicate by competitors. As DoubleClick is the leading provider of ad serving tools, it has a wide customer base both on the publisher and the advertiser side. This large publisher customer base improves the quality of services through the information gathered by DoubleClick's servers, in particular, the targeting of adverts. As adverts are better targeted, more publishers and advertisers are attracted by DoubleClick's services155 and ad targeting improves even further. Few respondents to the market investigation confirmed the view that the access

As indicated above, ad serving costs account for approximately 10-15% of the intermediation revenues of ad networks. All ad networks and ad exchange need some form of ad serving technology to operate.

Better targeting is attractive for both publishers and advertisers as it increases the monetization potential for publishers and achieves greater targeting for advertisers.


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