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Research Commentary ---Sponsored Search and Market Efficiency

Author

Listed:
  • Vasant Dhar

    (Stern School of Business, New York University, New York, New York 10012)

  • Anindya Ghose

    (Stern School of Business, New York University, New York, New York 10012)

Abstract

Sponsored search is the mechanism whereby advertisers pay a fee to Internet search engines to be displayed alongside organic (nonsponsored) web search results. Based on prior literature, we draw an analogy between these markets and financial markets. We use the analogy as well as the key differences to present a theoretical framework consisting of a set of research questions about the pricing of keywords and design choices available to firms in sponsored search markets. These questions define an agenda for future research in sponsored search markets. They also have practical implications for advertisers and online marketplaces such as search engines and social media sites that support advertising.

Suggested Citation

  • Vasant Dhar & Anindya Ghose, 2010. "Research Commentary ---Sponsored Search and Market Efficiency," Information Systems Research, INFORMS, vol. 21(4), pages 760-772, December.
    • Handle: RePEc:inm:orisre:v:21:y:2010:i:4:p:760-772
    DOI: 10.1287/isre.1100.0315
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Agam Gupta & Biswatosh Saha & Uttam K. Sarkar, 2017. "Emergent Heterogeneity in Keyword Valuation in Sponsored Search Markets: A Closer-to-Practice Perspective," Computational Economics, Springer;Society for Computational Economics, vol. 50(4), pages 687-710, December.
    2. Symitsi, Efthymia & Markellos, Raphael N. & Mantrala, Murali K., 2022. "Keyword portfolio optimization in paid search advertising," European Journal of Operational Research, Elsevier, vol. 303(2), pages 767-778.
    3. Yang, Yupin & Lu, Qiang (Steven) & Tang, Guanting & Pei, Jian, 2015. "The Impact of Market Competition on Search Advertising," Journal of Interactive Marketing, Elsevier, vol. 30(C), pages 46-55.
    4. Catherine Baethge & Julia Klier & Mathias Klier, 2016. "Social commerce—state-of-the-art and future research directions," Electronic Markets, Springer;IIM University of St. Gallen, vol. 26(3), pages 269-290, August.
    5. Haoyan Sun & Jianqing Chen & Ming Fan, 2021. "Effect of Live Chat on Traffic‐to‐Sales Conversion: Evidence from an Online Marketplace," Production and Operations Management, Production and Operations Management Society, vol. 30(5), pages 1201-1219, May.

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