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Consumer heterogeneity and paid search effectiveness : a large scale field experiment

Author: Thomas C Blake; Chris Nosko; Steve Tadelis; National Bureau of Economic Research,
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2014.
Series: Working paper series (National Bureau of Economic Research), no. 20171.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
Internet advertising has been the fastest growing advertising channel in recent years with paid search ads comprising the bulk of this revenue. We present results from a series of large scale field experiments done at eBay that were designed to measure the causal effectiveness of paid search ads. Because search clicks and purchase behavior are correlated, we show that returns from paid search are a fraction of  Read more...
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Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Thomas C Blake; Chris Nosko; Steve Tadelis; National Bureau of Economic Research,
OCLC Number: 882242007
Notes: "May 2014"
Description: 1 online resource (33 pages) : illustrations.
Series Title: Working paper series (National Bureau of Economic Research), no. 20171.
Responsibility: Tom Blake, Chris Nosko, Steven Tadelis.

Abstract:

Internet advertising has been the fastest growing advertising channel in recent years with paid search ads comprising the bulk of this revenue. We present results from a series of large scale field experiments done at eBay that were designed to measure the causal effectiveness of paid search ads. Because search clicks and purchase behavior are correlated, we show that returns from paid search are a fraction of conventional non-experimental estimates. As an extreme case, we show that brand-keyword ads have no measurable short-term benefits. For non-brand keywords we find that new and infrequent users are positively influenced by ads but that more frequent users whose purchasing behavior is not influenced by ads account for most of the advertising expenses, resulting in average returns that are negative.

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