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Empirical Analysis of Search Advertising Strategies
Bhanu C. Vattikonda, Vacha dave,
Saikat Guha, Alex C. Snoeren
Organic
results
Sponsored
results
Query
2
Huge and growing industry
20%
3
Source: IAB/PwC Internet Ad Revenue reports
Organic
Sponsored
Brand Ad
Competitor Ad
Are common advertising strategies profitable?
Metrics for campaign analysis
Click-through-rate (CTR)
Measures ability to attract users but not quality of users
Cost per acquisition (CPA) or cost per conversion:
Does not capture profitability (e.g., in case of organic results)
Profit-per-impression
Requires access to sensitive financial information from advertisers
User Flow
7
Search impression
Conversion
Search engine data
User click information
Cost of a particular advertising strategy
Number of conversions that an advertiser receives
8
How much is a conversion worth to the advertiser?
Value of a conversion
9
Net acquisition benefit (NAB)
10
Computing NAB
11
Comparing ad strategies
12
Common ad strategies we analyze
Cannibalization
Advertising for own brand name
Poaching
Advertising for a competitors brand name
Mobile ad extensions
Using ad extensions (e.g., call extension) on mobile devices
Organic
Sponsored
Search engine dataset
Month long click log data from a search engine
Billions of clicks
Millions of ads
Conversions for both ad and organic clicks
Several million dollars of ad spend
Bid that the advertiser placed for each ad click
15
Advertising for own brand name
Advertise for brand name
NAB is computed over search impressions where user searches for brand name and ad is shown
Do not advertise for brand name
NAB is computed over search impressions where user searches for brand name and ad is NOT shown
16
Advertising for own brand name
Yes, advertise
No, do not advertise
17
Advertising on own brand name
18
Incremental benefit is limited
32% advertisers net loss
19
Why do advertisers advertise for their brand name?
Click-through-rate is misleading
Click-through-rate not co
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