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Multiple keywords management in sponsored search advertising with interrelated consumer clicks

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  • Jang, Sungha
  • Kim, Alex Jiyoung
  • Yoon, Jiho

Abstract

Advertisers face difficult decisions when bidding on keywords in their search-engine campaigns. This paper provides guidance by empirically investigating the decisions of sponsored search advertisers, a search engine, and consumers across multiple keywords with different characteristics in a comprehensive manner. Specifically, we examine online retailers’ bidding patterns, the search engine’s rank decisions, and consumer click patterns for multiple interrelated keywords using simultaneous equations Tobit models with fixed effects. Our results show how advertiser bids, as well as consumer clicks, are interrelated across various keywords. Moreover, our optimization results suggest that advertisers can allocate advertising budgets more efficiently when the interrelationships among keywords are considered.

Suggested Citation

  • Jang, Sungha & Kim, Alex Jiyoung & Yoon, Jiho, 2022. "Multiple keywords management in sponsored search advertising with interrelated consumer clicks," Journal of Business Research, Elsevier, vol. 140(C), pages 459-470.
    • Handle: RePEc:eee:jbrese:v:140:y:2022:i:c:p:459-470
    DOI: 10.1016/j.jbusres.2021.11.015
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