DST19500 - Examples of Associated Online Advertising Service

These examples demonstrate the points raised in DST19400.

Example B

BCD group provides a very popular social media service which has billions of users worldwide. The social media service generates revenue by displaying adverts to users alongside user generated content.

It also provides a SSP which offers advertising inventory on the social media service, other services owned by the group and on various third party websites and platforms. The group’s SSP is the leading platform through which advertisers can bid for advertising inventory on the social media service.

The social media service’s large and active user base makes it attractive for advertisers and drives large transaction volumes through the group’s SSP. The SSP consequently derives a significant benefit from the social media service.

Example C

CDE group operates a search engine, and generates revenue by allowing businesses to pay it to display advertising against users’ search results. It also operates a service whereby it enters into agreements with third party websites to take control of their advertising space and auction this to other customers looking to display advertising across a range of websites, not just the search engine. This activity would be considered an online advertising service.

The search engine provider tracks users’ behaviour across both its search website and as they browse third party websites that participate in its advertising service. It also offers businesses seeking to advertise a similar set of products to use to target adverts at users. In this case the advertising service does derive significant benefit from the search engine.

Example D

DEF provides a very popular social media service in Avalon. In recent years, Avalon’s economy has grown very rapidly. The increase in wealth in Avalon has led to an explosion in international tourism and very strong demand for luxury goods, particularly from Europe. This has prompted many leading European brands to try to break into the Avalonian market. However, many businesses have found it difficult to penetrate the market.

DEF has set up a SSP and ad exchange, through which it sells advertising inventory from the social media service and third party publishers. The SSP’s close relationship with the social media service means it has extensive user data about Avalonian citizen’ consumer behaviour and has unique insights which enable it to target advertisements very effectively. This coupled with strong advertiser demand to show adverts to Avalonians enables DEF to charge a premium on the transactions it facilitates on its SSPs and ad exchanges. There is consequently a significant benefit from the social media service.

Example E

Group EFG operates an online marketplace. The group has developed advertising technology which enables sellers to differentiate themselves from their competitors through sponsored ads on search results. This technology has evolved and now allows advertisers and sellers to display adverts to customers on the marketplace. The group has developed highly advanced supporting technologies like ad servers and analytics which enable it to offer a comprehensive advertising solution.

Recognising this, EFG decides to exploit these tools by expanding into facilitating adverts on third party websites. It quickly becomes very popular with advertisers, who appreciate the high level of integration between the different services and the group’s end to end advertising offer.

The advertising services on third party websites derive a significant benefit from the marketplace because they utilise (and have evolved from) the technology developed by the online marketplace.

Example F

Group FGH operates a successful advertising exchange, which facilitates millions of trades each day. The group invests in a small but popular social media service. The social media service has a loyal and growing user base but has struggled to monetise the platform. The service only sells small volumes of advertising impressions to advertisers, and these volumes have not matched the growth in the service’s user base.

Its unlikely FGH’s advertising exchange derives a significant benefit from the social media service. The social media service is far smaller than the advertising exchange so it is unlikely to provide material benefits.

Example G

Group GHI operates an online marketplace. The marketplace is monetised through commission fees on successful marketplace transaction. It does not sell advertising space on the platform and does not collect significant data about users of the marketplace.

It also offers a DSP which specialises in purchasing advertising inventory for clients from niche publishers in the dance industry. The DSP is not integrated with the marketplace and no data is shared between the two services. There is no significant benefit from the marketplace, so it will not be an associated online advertising service.