The More, the Better? The Impact of Data Analytics and Data Provisioning on Publisher Competition

The rise of data analytics has spawned the data broker industry. Data analytics and data provisioning have played a pivotal role in data-driven advertising. In this study, we build an analytical model to analyze the strategic interactions between the data broker, competing publishers, and advertisers. We investigate the data broker’s data analytics and data provisioning strategies, publishers’ data purchasing strategies, as well as the advertisers’ choice between competing publishers. We find that the data broker’s data provisioning strategies depend on the difference of publishers’ information externalities and competition intensity between publishers. Interestingly, under some circumstances, the data broker chooses to sell competitor’s data only to the publisher with low externality, leading to lower provisioning of data. This result implies that the conventional wisdom that the data broker should sell more data to all publishers may not hold. We discuss the relevant implications and provide future research directions.