What is an aspect that can diminish the efficiency of an online advertising market?

The aspect that can diminish the efficiency of an online advertising market is low barriers to entry. When barriers to entry are low, it allows a multitude of new advertisers to enter the market easily. While this might initially seem beneficial, it can lead to an oversaturated marketplace where numerous advertisers compete for the same audience, driving up costs and reducing overall efficiency.

An influx of new entrants can dilute the existing value of ad placements, leading to increased competition and potentially lower quality of ads. This can also result in advertiser fatigue among consumers, who might be bombarded by excessive ads, thus diminishing the overall effectiveness of advertising campaigns.

In contrast, high barriers to entry can protect existing businesses and maintain a healthier competitive environment, where only the most capable advertisers thrive, leading to potentially more efficient market dynamics. Increased competition generally drives innovation and improvement in services, while a robust technology infrastructure supports a more effective marketplace by enabling better targeting and data analysis.