An Internet retailer?s (e-tailer?s) outstanding virtual location enhances the probability of being noticed by potential customers. The notion of a virtual location for e-tailers refers to the analogy to the physical location. In the empirical analysis, an e-tailer?s Internet search engine rank as well as its advertising activities in search engines serve as proxies for the virtual location. The results suggest that it is optimal for e-tailers to complement a high search engine rank with investments in online advertising. Moreover, banner ads seem to serve as price advertising mechanism, whereas sponsored links rather seem to be used in order to signal outstanding customer service. --
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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number
05-52.
Find related papers by JEL classification: M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Michael R. Baye & John Morgan, 2005.
"Brand and Price Advertising in Online Markets,"
Working Papers
2005-08, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
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