SHOULD COMPANIES BID ON THEIR OWN BRAND IN SPONSORED SEARCH?

Tobias Blask, Burkhardt Funk, Reinhard Schulte

Abstract

Sponsored Search allows companies to place text advertisements for selected keywords on Search Engine Results Pages (SERPs). The objective of the present research is to determine whether and under what circumstances it makes sense, in economic terms, for brand owners to pay for sponsored search ads for their brand keywords. This issue is the subject of a heated debate in business practice, especially when the company is already placed prominently in the organic search results. In this paper we describe and apply a non-reactive method that is based on an A/B-test. It was employed in a case study of a European Internet pharmacy. The results of this study indicate that the use of sponsored search advertising for the own brand name enables advertisers to generate more visitors (>10%), resulting in higher sales volumes at relatively low advertising costs even when the company is already listed in first position in the organic part of the respective SERP.

References

  1. Abhishek, V., & Hosanagar, K. (2007). Keyword generation for search engine advertising using semantic similarity between terms. Proceedings of the ninth international conference on Electronic commerce, 89-94
  2. Ashkan, A., Clarke, C. L., Agichtein, E., & Guo, Q. (2009). Classifying and Characterizing Query Intent. Proceedings of the 31th European Conference on IR Research on Advances in Information Retrieval, 578- 586
  3. Bechtold, S. (2011). Google AdWords and European trademark law. Communications of the ACM, 54(1), 30-32
  4. Brown, A., Jansen, B, & Resnick, M. (2007). Factors relating to the decision to click on a sponsored link. Decision Support Systems, 44(1), 46-59
  5. Danescu-Niculescu-Mizil, C., Broder, A. Z., Gabrilovich, E., Josifovski, V., & Pang, B. (2010). Competing for users' attention. Proceedings of the 19th international conference on World wide web - WWW 7810, 291-300
  6. Edelman, B., Ostrovsky, M., & Schwarz, M. (2007). Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords. American Economic Review, 97(1), 242- 259
  7. Fuxman, A., Tsaparas, P., Achan, K., & Agrawal, R. (2008). Using the wisdom of the crowds for keyword generation. Proceeding of the 17th international conference on World Wide Web - WWW 7808, 61-70
  8. Gauzente, C. (2009). Information search and paid results-proposition and test of a hierarchy-of-effect model. Electronic Markets, 19(2), 163-177
  9. Ghose, A., & Yang, S. (2008). Comparing performance metrics in organic search with sponsored search advertising. Proceedings of the 2nd International Workshop on Data Mining and Audience Intelligence for Advertising - ADKDD 7808, 18-26
  10. Hallerman, D. (2008). Search Engine Marketing: User and Spending Trends. eMarketer. Retrieved May 5, 2011, from http://www.emarketer.com/Reports/All/Emarketer_20 00473.aspx
  11. Jansen, B. J., & Mullen, T. (2008). Sponsored search: an overview of the concept, history, and technology. International Journal of Electronic Business, 6(2), 114-131
  12. Jansen, B. J. (2007). The comparative effectiveness of sponsored and nonsponsored links for Web ecommerce queries. ACM Transactions on the Web, Volume 1, Issue 1
  13. Kitts, B., & Leblanc, B. (2004). Optimal bidding on keyword auctions. Electronic Markets, 14(3), 186-201
  14. Rosso, M. & Jansen, B. J. (2010) "Brand Names as Keywords in Sponsored Search Advertising," Communications of the Association for Information Systems: Vol. 27, Article 6.
  15. Rosso, M. & Jansen, B. J. (2010b). Smart marketing or bait & switch: competitors' brands as keywords in online advertising. Proceedings of the 4th workshop on Information credibility, 27-34
  16. Sherif, M., & Hovland, C. (1961). Social judgment: assimilation and contrast effects in communication and attitude change. Yale University Press
  17. Shin, W. (2009). The Company that You Keep: When to Buy a Competitor's Keyword. marketing.wharton. upenn.edu
  18. Skiera, B. (2008). Stichwort Suchmaschinenmarketing. DBW Die Betriebswirtschaft, (68), 113-117
  19. Unrau, E. (2010) Wechselwirkungen zwischen bezahlter Suchmaschinenwerbung und dem organischen Index. Master Thesis, Leuphana University, unpublished
  20. Tweraser, S. (2010). Änderungen der GoogleMarkenrichtlinie für AdWords in Europa. Google Inside AdWords Blog. Retrieved May 5, 2011, from http://adwords-de.blogspot.com/2010/08/anderungender-google-markenrichtlinie.html.
  21. Varian, H. (2007). Position auctions. International Journal of Industrial Organization, 25(6), 1163-1178
  22. Varian, H. R. (2009). Online ad auctions. American Economic Review, 99(2), 430-434
  23. White, A. (2008). Search Engines: Left Side Quality versus Right Side Profits. Available at SSRN: http://ssrn.com/abstract=1694869
  24. Xu, L., Chen, J., & Whinston, A. (2009). Too Organic for Organic Listing? Interplay between Organic and Sponsored Listing in Search Advertising. Social Science Research. Austin, Texas
  25. Yang, S., & Ghose, A. (2010). Analyzing the Relationship Between Organic and Sponsored Search Advertising: Positive, Negative or Zero Interdependence? Marketing Science, Vol. 29, No. 4, July-August 2010, 602-623.
  26. Yao, S., & Mela, C. F. (2009). Sponsored Search Auctions: Research Opportunities in Marketing. Foundations and Trends in Marketing, 3(2), 75-126
  27. Zajonc, R. B. (1968). Attitudinal effects of mere exposure. Pers. Soc. Psycho, 9(2. Part 2), 1-27
Download


Paper Citation


in Harvard Style

Blask T., Funk B. and Schulte R. (2011). SHOULD COMPANIES BID ON THEIR OWN BRAND IN SPONSORED SEARCH? . In Proceedings of the International Conference on e-Business - Volume 1: ICE-B, (ICETE 2011) ISBN 978-989-8425-70-6, pages 14-21. DOI: 10.5220/0003515300140021


in Bibtex Style

@conference{ice-b11,
author={Tobias Blask and Burkhardt Funk and Reinhard Schulte},
title={SHOULD COMPANIES BID ON THEIR OWN BRAND IN SPONSORED SEARCH?},
booktitle={Proceedings of the International Conference on e-Business - Volume 1: ICE-B, (ICETE 2011)},
year={2011},
pages={14-21},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0003515300140021},
isbn={978-989-8425-70-6},
}


in EndNote Style

TY - CONF
JO - Proceedings of the International Conference on e-Business - Volume 1: ICE-B, (ICETE 2011)
TI - SHOULD COMPANIES BID ON THEIR OWN BRAND IN SPONSORED SEARCH?
SN - 978-989-8425-70-6
AU - Blask T.
AU - Funk B.
AU - Schulte R.
PY - 2011
SP - 14
EP - 21
DO - 10.5220/0003515300140021