We ask how the advertising mechanisms of digital platforms impact product prices. We present a model that integrates three fundamental features of digital advertising markets: (i) advertisers can reach customers on and off-platform, (ii) additional data enhances the value of matching advertisers and consumers, and (iii) bidding follows auction-like mechanisms. We compare data-augmented auctions, which leverage the platform's data advantage to improve match quality, with managed campaign mechanisms, where advertisers' budgets are transformed into personalized matches and prices through auto-bidding algorithms. In data-augmented second-price auctions, advertisers increase off-platform product prices to boost their competitiveness on-platform. This leads to socially efficient allocations on-platform, but inefficient allocations off-platform due to high product prices. The platform-optimal mechanism is a sophisticated managed campaign that conditions on-platform prices for sponsored products on off-platform prices set by all advertisers. Relative to auctions, the optimal managed campaign raises off-platform product prices and further reduces consumer surplus.

翻译：我们探究数字平台的广告机制如何影响产品价格。我们构建了一个模型，整合了数字广告市场的三个基本特征：（i）广告主可以在平台内外触达消费者，（ii）额外数据增强了广告主与消费者匹配的价值，（iii）竞价遵循拍卖式机制。我们比较了两种机制：数据增强型拍卖（利用平台的数据优势提升匹配质量）与托管式营销活动（通过自动竞价算法将广告主预算转化为个性化匹配与价格）。在数据增强型第二价格拍卖中，广告主提高平台外部产品价格以增强其在平台内的竞争力。这导致了平台内具有社会效率的资源配置，但因高额产品价格造成平台外资源配置低效。平台最优机制是一种精密的托管式营销活动，该活动将赞助产品的平台内价格条件设定为所有广告主设定的平台外价格。相较于拍卖，最优托管式营销活动会提高平台外产品价格，并进一步减少消费者剩余。