The impact of ad positioning in search engine advertising: a multifaceted decision problem

Abstract

A general desire in search engine advertising is to rank at the topmost position for maximum attention. Based on a search engine advertising campaign, this study provides empirical evidence that this approach does not necessarily maximize sales. The analysis reveals relationships that result in a non-linear rank profitability. As a consequence, advertisers face the multifaceted decision problem of identifying the optimal rank for their search engine advertisements. The outcome of the advertising activity is determined by three dimensions: the number of prospects (quantity), their acquisition costs (price), and their quality, i.e. is the likelihood to result in sales revenue. The results also differ if evaluated on campaign or keyword level. Consequently, research and practice have to consider the effect of a non-monotone rank profitability in search engine advertising, which has been neglected in previous studies. Furthermore, the differences on campaign and keyword level affect the evaluation and corresponding decisions when managing search engine advertising.