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NET Institute*
www.NET
Working Paper #07-23
September 2007
Search Engine Advertising: Pricing Ads to Context
Avi Goldfarb
University of Toronto
Catherine Tucker
MIT
* The Networks, Electronic Commerce, and Telecommunications (“NET”) Institute,
http://www.NET, is a non-profit institution devoted to research on network
industries, electronic commerce, telecommunications, the Internet, “virtual networks”
comprised of computers that share the same technical standard or operating system, and
on network issues in general.
Search Engine Advertising:
Pricing ads to context
*
Avi Goldfarb and Catherine E. Tucker
October 2007
*
Avi Goldfarb is Assistant Professor of Marketing, Rotman School of Management, University of Toronto, 105 St
George St., Toronto, ON. Tel. 416-946-8604. Fax 416-978-5433. Email: agoldfarb@rotman.utoronto.ca. Catherine
E. Tucker is Assistant Professor of Marketing, MIT Sloan School of Business, 1 Amherst St., E40-167, Cambridge,
MA. Tel. 617-252-1499. Email: cetucker@. We wish to thank Jayne Huang for excellent research assistance,
and Anindya Ghose, Shane Frederick, as well as seminar participants at SCECR 2007, LBS and the University of
Toronto for comments. We thank the NET Institute www.NET for financial support.
Search Engine Advertising: Pricing Ads to Context
Abstract
Each search term put into a search engine produces a separate set of results. C
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