Search Ads Research Articles

How Does Pharmaceutical Advertising Affect Consumer Search?

Advertising is often criticized for presenting only partial or selective information about products. This criticism is particularly pronounced for health products, where large asymmetries in information may exist between consumers and firms. This paper explores how government restrictions designed to prevent selective advertising affect the types of information to which consumers are exposed. We exploit a natural experiment in the form of an FDA crackdown that prevented pharmaceutical companies from using selectively chosen information in their Internet search ads. Since companies could not adequately document side-effects within the advertising space allowed, they removed their ads. Our results suggest that, after the ads were removed, consumers were more likely to seek information from websites based on user-generated content or websites that focused on medical treatments not regulated by the FDA, such as Canadian pharmacies and sites promoting herbal remedies.

Impression-plus-click auctions

Internet search companies generate the majority of their multibillion dollar revenue from selling ad placement, often in the form of short, textual ads that appear next to web search results. Such sponsored search ads are typically sold via pay-per-click auctions in which advertisers bid for placement, but pay publishers (i.e., search companies) only when users click on their ads. As payments are made only when ads are clicked, publishers consider both the advertiser's click bid and also the ad's quality (i.e., the probability of it being clicked) when deciding which ads to display [Edelman et al. 2007].

Search engines and ads

Search engines and ads

The Effects of Persuasion Knowledge on Click-Through of Keyword Search Ads: Moderating Role of Search Task and Perceived Fairness

This study examines the effects of-persuasion knowledge and conditions that influence its impact in the context of keyword search ads. Students participated in an experiment featuring a 2 (persuasion knowledge: primed vs. not primed) x 2 (search tasks: complex vs. less complex) between-subjects design with a covariate (perceived fairness). Results reveal online users are less likely to click through keyword search ads when they are aware that advertisers' persuasion attempts are at work. However, this negative impact is attenuated when the search task is complex and level of perceived fairness of the ad practice is high.

Click Fraud

Click fraud is the practice of deceptively clicking on search ads with the intention of either increasing third-party website revenues or exhausting an advertiser's budget. Search advertisers are forced to trust that search engines detect and prevent click fraud even though the engines get paid for every undetected fraudulent click. We find conditions under which it is in a search engine's interest to allow some click fraud. Under full information in a second-price auction, if x% of clicks are fraudulent, advertisers will lower their bids by x%, leaving the auction outcome and search engine revenues unchanged. However, if we allow for uncertainty in the amount of click fraud or change the auction type to include a click-through component, search engine revenues may rise or fall with click fraud. A decrease occurs when the keyword auction is relatively competitive because advertisers lower their budgets to hedge against downside risk. If the keyword auction is less competitive, click fraud may transfer surplus from the winning advertiser to the search engine. Our results suggest that the search advertising industry would benefit from using a neutral third party to audit search engines' click fraud detection algorithms.

Do Consumers Benefit from Concentration in the New Economy? - A Review of Google's Mergers, Acquisitions, and Arrangements

Within the last three years, Google has acquired YouTube and DoubleClick and has attempted to control part of Yahoo!'s search advertising business. Two of the deals have not raised antitrust concerns by competition authorities. I review these deals with a focus on consumer welfare. Consumers are affected by being on one side of a multisided platform. Provided that better matches of search ads are beneficial, I demonstrate that the mergers may have positive effects for consumers through better matches between users and search ads. However, this does not substitute an in-depth antitrust assessment of the deals.

The Impact of Organic versus Non-Organic Headlines on Response Rates to Search Ads

ABSTRACT Advertising expenditures online are now dominated by text search ads rather than display ads. Despite the importance and growth of text search ads, little research has been conducted concerning how search and display ads may be jointly deployed or how a text search ad strategy can be maximized. In this article, a model for the joint deployment of search and display ads is presented. On the basis of this model research hypotheses are tested concerning factors that influence text ad effectiveness. The research shows that text ads can be very effective in driving response especially when the text ad format is consistent with the search motives of the visitor. Implications for marketing in this environment are discussed.

The computer and the chef

Although search advertising has gained popularity in recent years, research on the content of search advertising is scarce. This study develops a conceptual framework to understand how market competition affects what a firm advertises in its search ads. Search advertisements from two industries (i.e., hotel and car industries) are used to test hypotheses developed from the conceptual framework. The findings indicate that in a highly competitive market (1) firms engage in more price advertising in their search ads and (2) intermediaries are more likely to increase price advertising in their search ads than brand suppliers. More interestingly, competition from intermediaries and brand suppliers has different effects on the content of search advertising by intermediaries and brand suppliers. These findings enhance the understanding of firms' behaviors in determining their search advertising content based on the intensity of market competition.