Abstract
Given the dominance of online platforms in attracting consumers and advertisers, online publishers are squeezed between declining traffic and advertising revenues from their website content. In turn, super platforms, the dominant content dissemination platforms, such as Google and Facebook, are monetizing online content at the expense of publishers by selling ad impressions in advertising auctions. In this work, we analyze publishers’ possibilities of forming a coalition and show that, under a set of assumptions, the optimal strategy for publishers is cooperation against a super platform rather than posting content on the super platform. Not choosing to publish on a super platform can yield the whole coalition more traffic, enabling some individual publishers to recoup the lost traffic. We further show that if the coalition does not forbid diversification, most publishers choose both coalition and super platform.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Goh, K.-Y., Heng, C.-S., Lin, Z.: Social media brand community and consumer behavior: quantifying the relative impact of user- and marketer-generated content. Inf. Syst. Res. 24, 88–107 (2013)
Salminen, J.: Startup Dilemmas—Strategic Problems of Early-Stage Platforms on the Internet (2014). http://www.doria.fi/handle/10024/99349
Albuquerque, P., Pavlidis, P., Chatow, U., Chen, K.-Y., Jamal, Z.: Evaluating promotional activities in an online two-sided market of user-generated content. Market. Sci. 31, 406–432 (2012)
Boudreau, K.: Open platform strategies and innovation: granting access vs. devolving control. Manag. Sci. 56, 1849–1872 (2010)
Jansen, B.J., Schuster, S.: Bidding on the buying funnel for sponsored search and keyword advertising. J. Electron. Commer. Res. 12, 1–18 (2011)
Arrow, K.J.: The organization of economic activity: issues pertinent to the choice of market versus nonmarket allocation. Anal Eval Public Expend. 1, 59–73 (1969)
Mayes, B.T., Allen, R.W.: Toward a definition of organizational politics. Acad. Manag. Rev. 2, 672–678 (1977)
Stevenson, W.B., Pearce, J.L., Porter, L.W.: The concept of “coalition” in organization theory and research. Acad. Manag. Rev. 10, 256–268 (1985)
Grant, R.M., Baden-Fuller, C.: A knowledge accessing theory of strategic alliances. J. Manag. Stud. 41, 61–84 (2004)
Katz, M.L., Shapiro, C.: Network externalities, competition, and compatibility. Am. Econ. Rev. 75, 424–440 (1985)
Economides, N.: The economics of networks. Int. J. Ind. Organ. 14, 673–699 (1996)
Argentesi, E., Filistrucchi, L.: Estimating market power in a two-sided market: the case of newspapers. J. Appl. Econom. 22, 1247–1266 (2007)
Manduchi, A., Picard, R.: Circulations, revenues, and profits in a newspaper market with fixed advertising costs. J. Media Econ. 22, 211–238 (2009)
Deneckere, R., Davidson, C.: Incentives to form coalitions with Bertrand competition. RAND J. Econ. 473–486 (1985)
Arslan, B.: The interplay of competitive and cooperative behavior and differential benefits in alliances. Strateg. Manag. J. (2017)
Bakos, J.Y., Brynjolfsson, E.: From vendors to partners: information technology and incomplete contracts in buyer–supplier relationships. J. Organ. Comput. Electron. Commer. 3, 301–328 (1993)
Coleman, J.S.: The benefits of coalition. Public Choice 8, 45–61 (1970)
Ju, A., Jeong, S.H., Chyi, H.I.: Will social media save newspapers? J. Pract. 8, 1–17 (2014)
Abbring, J.H., Ours, J.C.V.: Selling news and advertising space: the economics of Dutch newspapers. De Economist 142, 151–170 (1994)
Couldry, N.: Does ‘the media’ have a future? Eur. J. Commun. 24, 437–449 (2009)
Teece, D.J.: Business models, business strategy and innovation. Long Range Plan. 43, 172–194 (2010)
Umanets, E.: Effects of Obtained Benefits on Willingness to Pay and Word-of-Mouth Behavior in Newspaper Industry (2014)
Gabszewicz, J.J., Laussel, D., Sonnac, N.: Attitudes toward advertising and price competition in the press industry. In: Economics of Art and Culture Invited Papers at the 12th International Conference of the Association of Cultural Economics International, pp. 61–74. Emerald Group Publishing Limited (2003)
Voorveld, H.A.: Media multitasking and the effectiveness of combining online and radio advertising. Comput. Hum. Behav. 27, 2200–2206 (2011)
Kaiser, U., Wright, J.: Price structure in two-sided markets: evidence from the magazine industry. Int. J. Ind. Organ. 24, 1–28 (2006)
McPhillips, S., Merlo, O.: Media convergence and the evolving media business model: an overview and strategic opportunities. Market. Rev. 8, 237–253 (2008)
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 Springer Nature Switzerland AG
About this paper
Cite this paper
Salminen, J., Maslennikov, D., Jansen, B.J., Olkkonen, R. (2018). With or Without Super Platforms? Analyzing Online Publishers’ Strategies in the Game of Traffic. In: Staab, S., Koltsova, O., Ignatov, D. (eds) Social Informatics. SocInfo 2018. Lecture Notes in Computer Science(), vol 11186. Springer, Cham. https://doi.org/10.1007/978-3-030-01159-8_24
Download citation
DOI: https://doi.org/10.1007/978-3-030-01159-8_24
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-01158-1
Online ISBN: 978-3-030-01159-8
eBook Packages: Computer ScienceComputer Science (R0)