Analyzing search engine advertising: firm behavior and cross-selling in electronic markets

The phenomenon of sponsored search advertising is gaining ground as the largest source of revenues for search engines. Firms across different industries have are beginning to adopt this as the primary form of online advertising. This process works on an auction mechanism in which advertisers bid for different keywords, and final rank for a given keyword is allocated by the search engine. But how different are firm's actual bids from their optimal bids? Moreover, what are other ways in which firms can potentially benefit from sponsored search advertising? Based on the model and estimates from prior work [10], we conduct a number of policy simulations in order to investigate to what extent an advertiser can benefit from bidding optimally for its keywords. Further, we build a Hierarchical Bayesian modeling framework to explore the potential for cross-selling or spillovers effects from a given keyword advertisement across multiple product categories, and estimate the model using Mark...

• Type: Conference
• Year: 2008
• Where: WWW
• Authors: Anindya Ghose, Sha Yang
• Keywords: Internet Technology, Keyword Advertisement, Multiple Product Categories, Search Keyword Advertisements, WWW 2008