A CeBER research seminar titled User attention and targeting inefficiency in ads-based digital platforms will take place on March 14. The seminar will be presented by Carmelo Cennamo (Professor of Strategy and Entrepreneurship at Copenhagen Business School) and it will take place in CeBER Seminar Room in the former Geophysical Institute from 11:00 am.
ABSTRACT
Digital platforms like Facebook operating an ads-based business model face a strategic challenge in balancing advertisers’ desire for broad advertising reach and users’ potential dissatisfaction with irrelevant ads. These platforms use targeted advertising to address such trade-off; and yet, there is evidence of persistence of irrelevant ads. Are such digital platforms exploiting users and their data in the interests of advertisers? We address this question through an analytical model, which examines a digital platform charging advertisers for targeted advertising. We focus on the platform’s ability to broker user attention – a form of “efficiency" at making advertising harder to ignore, thus capable of influencing a larger number of users. We show that increased user attention brokering (ie. a more efficient platform) leads to higher advertising returns for advertisers. The prospect though, leads to an increase in the number of advertisers on the platform, and consequently an increase in the number of less relevant and lower-quality ads. Overall, this lowers users’ welfare. We derive policy implications by further showing different scenarios under which increase attention brooking ability of the platform benefits or hinders users’ welfare.
Short Bio:
Carmelo Cennamo is a Professor of Strategy and Entrepreneurship at Copenhagen Business School, where he serves as Co-Director of the MBA program's Entrepreneurship concentration and Director of the Digital Markets Competition Forum. He is also an Affiliate Professor at SDA Bocconi School of Management, leading the Platform Economy & Regulation Lab. A recognized authority on competition in digital platform markets and business ecosystems, Professor Cennamo is a sought-after keynote speaker at academic conferences, corporate events, and public forums. His research explores the unique dynamics of multi-sided platforms, focusing on how their distinctive characteristics shape competition, ecosystem management, and strategic decision-making in digital markets. Recently, his work has expanded to examinethe transformative impact of digital platforms on traditional industries, with a particular emphasis on market definition, competition policy, and antitrust regulations.
As a leading voice in the field, Professor Cennamo was one of three academic experts consulted in a public hearing at the EU Parliament on the Digital Markets Act. His research has been published in premier academic journals such as Strategic Management Journal (SMJ), Organization Science (OrgSci), Research Policy (RP), Journal of Management Studies (JMS), Journal of Management (JoM), and Information Systems Research (ISR). His insights have also reached broader audiences through outlets like MIT Sloan Management Review, Harvard Business Review, California Management Review, and the Financial Times. Several of his articles have earned prestigious awards, highlighting their impact on both academic and practical discussions.