Online Ad Auctions

  title={Online Ad Auctions},
  author={Hal R. Varian},
  journal={The American Economic Review},
  • H. Varian
  • Published 1 April 2009
  • Business, Economics
  • The American Economic Review
I describe how search engines sell ad space using an auction. I analyze advertiser behavior in this context using elementary price theory and derive a simple way to estimate the producer surplus generated by online search advertising. It appears that the estimated value of online advertising tends to be between 2 and 2.3 times advertising expenditures. JEL: D44 (Auctions), D21 (Firm Behavior) 

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