Interesting theory. I can think of two additional counterarguments:
1) the decline in price of advertising belies the growth in users and the steady increase in advertising spend Y/Y (+14% in 2014 according to Mary Meeker's latest report).
2) the paper focuses only on advertising targeted toward the bottom of the purchase funnel. A considerable amount of display ad revenue comes from upper-funnel ads, where the objectives are not behavioral but rather perceptual. That said, I don't know what proportion of total display ad revenue falls into this category.
1) the decline in price of advertising belies the growth in users and the steady increase in advertising spend Y/Y (+14% in 2014 according to Mary Meeker's latest report).
2) the paper focuses only on advertising targeted toward the bottom of the purchase funnel. A considerable amount of display ad revenue comes from upper-funnel ads, where the objectives are not behavioral but rather perceptual. That said, I don't know what proportion of total display ad revenue falls into this category.