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The Impact of Market Competition on Search Advertising

Author

Listed:
  • Yang, Yupin
  • Lu, Qiang (Steven)
  • Tang, Guanting
  • Pei, Jian

Abstract

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.

Suggested Citation

  • Yang, Yupin & Lu, Qiang (Steven) & Tang, Guanting & Pei, Jian, 2015. "The Impact of Market Competition on Search Advertising," Journal of Interactive Marketing, Elsevier, vol. 30(C), pages 46-55.
    • Handle: RePEc:eee:joinma:v:30:y:2015:i:c:p:46-55
    DOI: 10.1016/j.intmar.2015.01.002
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    References listed on IDEAS

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    3. Rex Yuxing Du & Mingyu Joo & Kenneth C. Wilbur, 2019. "Advertising and brand attitudes: Evidence from 575 brands over five years," Quantitative Marketing and Economics (QME), Springer, vol. 17(3), pages 257-323, September.
    4. Rex Yuxing Du & Mingyu Joo & Kenneth C. Wilbur, 2018. "Advertising and Brand Attitudes: Evidence from 575 Brands over Five Years," Papers 1810.07783, arXiv.org.
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    6. Nyamwanza L. & Madzivire E. & Madzivire E., 2020. "Impact of Management Accounting on Decision Making: A Zimbabwean Perspective," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 9(1), pages 37-49.

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