Northern exposure: a field experiment measuring externalities between search advertisements

“North” ads, or sponsored listings appearing just above the organic search results, generate the majority of clicks and revenues for search engines. In this paper, we ask whether the competing north ads exert externalities on each other. In particular, does increasing the number of rival north ads decrease the number of clicks I receive on my own north ad? We conduct a controlled experiment to investigate this question and find, to our surprise, that additional rival ads in the north tend to increase rather than decrease the click-through rate (CTR) of the top sponsored listing. We propose several possible explanations for this phenomenon, and point out directions for new theoretical models of sponsored search. Categories and Subject Descriptors H.5.4 [Information Interfaces and Presentation]: Hypertext/Hypermedia; J.4 [Social and Behavioral Sciences]: Economics General Terms Economics, Experimentation, Measurement Keywords Sponsored search, advertising, externalities, page placem...

• Type: Conference
• Year: 2010
• Where: SIGECOM
• Authors: David H. Reiley, Sai-Ming Li, Randall A. Lewis
• Keywords: Ads Exert Externalities, ECommerce, North Ad, Rival North Ads, SIGECOM 2010