Paper ID
2182
Description
The increasing demand of using data to generate insights has spawned the new data broker industry. Data brokers are playing an increasingly critical role in the data-driven advertising ecosystem. Motivated by this new phenomenon, we build an analytical model to analyze the interplay between the data broker’s data quality decision and the firm’s decisions on ads delivery choice and product pricing. We find that when the firm’s ads delivery capability vis-à-vis that of the data broker is either low or high, the data broker may offer high quality data to the firm. Interestingly, under some circumstances, the data broker may offer low quality data to the firm, incentivizing the latter to employ the former’s ads delivery service. This result suggests that data quality can be a strategic tool leveraged by the data broker to affect firm’s ads delivery choice. We discuss implications and provide future extensions.
Recommended Citation
Zhang, Xin; Zhang, Ran; Yue, Wei Thoo; and Yu, Yugang, "What is Your Data Strategy? The Strategic Interactions in Data-Driven Advertising" (2019). ICIS 2019 Proceedings. 24.
https://aisel.aisnet.org/icis2019/economics_is/economics_is/24
What is Your Data Strategy? The Strategic Interactions in Data-Driven Advertising
The increasing demand of using data to generate insights has spawned the new data broker industry. Data brokers are playing an increasingly critical role in the data-driven advertising ecosystem. Motivated by this new phenomenon, we build an analytical model to analyze the interplay between the data broker’s data quality decision and the firm’s decisions on ads delivery choice and product pricing. We find that when the firm’s ads delivery capability vis-à-vis that of the data broker is either low or high, the data broker may offer high quality data to the firm. Interestingly, under some circumstances, the data broker may offer low quality data to the firm, incentivizing the latter to employ the former’s ads delivery service. This result suggests that data quality can be a strategic tool leveraged by the data broker to affect firm’s ads delivery choice. We discuss implications and provide future extensions.