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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Decision Support Systems, Volume 52, Issue 1, December 2011, Pages 1–8
Keyword-based ads are becoming the dominant form of advertising online as they enable customization and tailoring of messages relevant to potential consumers. Two prominent channels within this sphere are the search channel and the content channel. We empirically examine the interaction between these two channels. Our results indicate significant cannibalization across the two channels as well as significant diminishing returns to impressions within each channel. This suggests that under certain conditions both channels may need to be used to optimize returns to advertising both for advertisers and service providers such as Google. Our game theoretic analysis which builds upon our empirical findings reveals that for intermediate budget values it is optimal to use both channels whereas for very low (very high) budget values it is optimal to use only the content (search) channel. Further as budget increases the advertiser should offer more for ads displayed on the search channel to optimally incentivize the service provider.
Online advertising is becoming increasingly prominent. According to eMarketer, a leading online market research company, an estimated $22.37 billion was spent on online advertising of various forms in 2009, of which $10.78 billion was spent on keyword based ads (primarily through search engines). Several different formats of online advertising have been tried out, including keyword-based ads (with a 2009 market share of 48%, according to eMarketer), banner ads (21%), classifieds (10%), lead generation (7%), rich media (7%), video ads (5%), and email based ads (1%). Google is estimated to control about 70% of the online advertising market, according to Browser Media, a UK-based Search Engine Marketing agency. Clearly, keyword-based advertising has come to dominate this landscape. Within keyword-based advertising, two distinct channels have emerged — search channel and content channel. Ads on the search channel are displayed alongside search results, in response to the search keywords entered by the user. Ads on the content channel are displayed on a page containing content that is relevant to ads. The decision to show an ad on a content page is determined by the relevance of the ad to the content on the page. Search based advertising can be viewed as the more “active” of the two channels, because the user enters specific keywords that they are searching for information about. However, the philosophy behind both channels is the same — the focus is on trying to serve relevant ads based on an accurate determination of the user's interest, either through keywords that the user enters (in the case of search channel), or through the nature of the content-website the user visits (in the case of content channel).
نتیجه گیری انگلیسی
To conclude, in this paper we present an analysis of interaction between ad impressions and within-channel and cross-channel click-through behavior in online keyword-based advertisements over search and content channels. This is novel in the context of research on online keyword advertising, where previous work has focused on other issues such as optimal rank-allocation of search ads and the impact of rank on ad performance. Additionally, our work is novel in the context of work on advertising in general that is related to multiple media planning, as we explore the role of ad impressions in influencing the information-seeking behavior of consumers across multiple channels. The availability of click-through data, which was hitherto not available in conventional media settings, makes it possible to conduct this analysis. Our empirical analysis finds that ad impressions on the search channel are associated with a decrease in click-through rates on the content channel, and vice-versa. We also find evidence of a within-channel effect, wherein an increase in ad impressions on the search (or content) channel is associated with a decrease in click-through rates on the same search (or content) channel. We use the empirical results to formulate a model of the strategic interaction between the advertiser and service provider in the form of a two-period game, wherein the advertiser chooses the cost per click values given budget in the first period to maximize its expected number of clicks, and the service provider chooses the number of impressions given the advertiser's choice of CPC values to maximize its click-driven profit. A numerical analysis of this model reveals that at lower budget values, the optimal cost per click is more or less the same on the search and content channels while the initial impressions are mainly displayed on the content channel. However, as the advertiser's budget increases, the advertiser needs to increase its cost per click on the search channel, in order to maximize the total number of clicks, whereas the optimal cost per click on the content channels stays flat. Increased cost per click on the search channel in turn induces the service provider to generate more impressions on the search channel. For a sufficiently high budget, the search channel gets utilized almost exclusively.