The digital advertising industry is characterized by a proliferation of specialized intermediaries that help advertisers in their purchases of online ad space. This study contributes to the analysis of the vertical complementarities in this market by posing and estimating a structural econometric model of how advertisers match with their intermediaries. Exploiting novel data and some recent methods in the estimation of many-to-many matching games for large markets, we quantify the value created by the matches, their driving forces and, counterfactually, evaluate the likely effects of the growing concentration among intermediaries. The estimates clearly show that competing advertisers benefit from dealing with a common intermediary and, moreover, offer a precise quantification of various forces including industry specialization and exclusive contracting.
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