The Brand Effect of Key Phrases and Advertisements in Sponsored Search

Abstract

ABSTRACT:In this paper, we analyze the relationship between performance and use of brand terms in the key phrases that link advertisements to searcher queries. We use data that consist of more than 2.5 million daily records from a key word advertising campaign of a major U.S. retailer. The campaign spanned nearly four years, involved approximately $8 million in advertising cost, and generated more than $23 million in sales. We categorize key phrases and advertisements as either brand focused or non-brand focused. Using analysis of variance in a 2 × 2 design, we analyze use of branded terms on the critical key word advertising metrics of number of clicks, cost per click, sales revenue generated, number of orders, number of items ordered, and return on advertising cost, as well as number of impressions triggered by these key phrases. Therefore, we investigate a significant spectrum of user actions and consumer behaviors in a sponsored search campaign. Our findings show that there is a significant advantage to matching branding terms in key phrases and advertisements relative to any other combination of key phrase or advertisement for all the metrics examined. A combination of a branded phrase and a branded advertisement generated 15 times more sales revenue than any other combination of phrase and advertisement. Therefore, a focus by key word advertisers on branded terms for search engine ads could be quite beneficial for both the effectiveness and efficiency of key word advertising. The implication for online advertising and key word search in the e-commerce domain, especially for large retailers, is that brand mentions in both key phrase and advertisements correlate with higher conversions.KEY WORDS AND PHRASES: Branding, brands, key word advertising, online advertising, pay per click, search engine marketing, sponsored search.Approximately half of all purchases in the business-to-consumer e-commerce category are preceded by a Web search [39], indicating the importance that search engines play in online shopping and sales. In this e-commerce environment [71], online advertising on search engines has blossomed. The most popular form of online marketing is key word advertising (also referred to as sponsored search, pay per click [PPC], and search engine advertising) [61]. Therefore, search engine advertising is becoming increasingly important, with some companies spending large amounts of money so that potential customers using search engines can see their ads.Sponsored search, emerging in 1998 [16], has rapidly become the central business model of the major search engines, of which the PPC model is the most prevalent [45]. Financed by advertising revenue, sponsored search has

Achieving more by saying less? On the Moderating Effect of Information Cues in Paid Search

“…In turn, all users searching for a lottery are attributed to product-specific keywords. In line with Jansen et al [13] we expect for those keywords an information cue to provide useful information in regard to the specific offer. Therefore, searchers should be more likely to click on ads which contain an information cue.…”

“…Log-odds suggest an opposite effect and therefore hypothesis H3b is rejected. Such a diametric user behavior in terms of clicks and conversions is also observed by Haans et al [19] and might be seen as another indication for a selfselection mechanism in the context of paid search [13]. Interaction terms reveal that users who search for product-specific terms respond significantly different in terms of clicks compared to all other keyword groups.…”

“…However, researchers have only just started to investigate different types of messages in the context of paid search. It is already known that user behavior is determined by factors such as the ad copy itself, but also by the search query [13] and the position where the ad appears on a SERP [7]. In order to evaluate user behavior in response to information cues we shall consider three areas of paid search research: keywords, ad positioning, and ad copies.…”

“…This user heterogeneity in relation to keyword characteristics is supported by Nottorf and Funk [15] and Lu and Zhao [4] who empirically show that users act differently in terms of CTR and CVR relative to the keyword characteristics entered. Jansen et al [13] particularly focus on the interrelation between keywords and the ad copy. Their analysis reveals that brand keywords in combination with a branded ad copy design is a major driver of sales revenue.…”

Differential Effects of Keyword Selection in Search Engine Advertising on Direct and Indirect Sales

“…According to a recent survey by eMarket, companies nowadays spend more than 45 percent of their Internet marketing budget on SEA. 1 Despite the notable investments in SEA, in practice, the management of SEA lacks key guidance and principles [12,24]. For advertisers, the match between the keywords that they bid for and the term that consumers use in their queries is critical to SEA performance.…”