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Empirical Generalizations in Search Engine Advertising

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  • Abou Nabout, Nadia
  • Lilienthal, Markus
  • Skiera, Bernd

Abstract

This article compares prices per click and search engine advertising (SEA) effectiveness across six countries and 15 industries over four years. We find that prices per click are highest in the United States and United Kingdom, as well as in the financial and Internet services industries, but are lower in retail than in services industries. In highly competitive markets, increases in SEA expenditures may increase prices per click that do not necessarily lead to higher advertising effectiveness, here measured as a higher number of clicks. To analyze and compare advertising effectiveness across industries, we decompose the effect of increases in SEA expenditures on prices per click (price effect) and number of clicks (quantity effect). A cross-country, cross-industry study shows that 44 percent of the increase in SEA expenditures is associated with more clicks and 56 percent with higher prices.

Suggested Citation

  • Abou Nabout, Nadia & Lilienthal, Markus & Skiera, Bernd, 2014. "Empirical Generalizations in Search Engine Advertising," Journal of Retailing, Elsevier, vol. 90(2), pages 206-216.
    • Handle: RePEc:eee:jouret:v:90:y:2014:i:2:p:206-216
    DOI: 10.1016/j.jretai.2014.03.002
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    References listed on IDEAS

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    2. Symitsi, Efthymia & Markellos, Raphael N. & Mantrala, Murali K., 2022. "Keyword portfolio optimization in paid search advertising," European Journal of Operational Research, Elsevier, vol. 303(2), pages 767-778.
    3. Jin Zhang & Jilong Zhang & Guoqing Chen, 2023. "A semantic transfer approach to keyword suggestion for search engine advertising," Electronic Commerce Research, Springer, vol. 23(2), pages 921-947, June.
    4. Philipp Herrmann & Michael Mueller, 2014. "Is it Always Best to be on Top? The Effect of Ad Positioning on Key Performance Indicators in Search Engine Advertising," Working Papers Dissertations 09, Paderborn University, Faculty of Business Administration and Economics.
    5. Juan José López García & David Lizcano & Celia MQ Ramos & Nelson Matos, 2019. "Digital Marketing Actions That Achieve a Better Attraction and Loyalty of Users: An Analytical Study," Future Internet, MDPI, vol. 11(6), pages 1-16, June.
    6. Bayer, Emanuel & Srinivasan, Shuba & Riedl, Edward J. & Skiera, Bernd, 2020. "The impact of online display advertising and paid search advertising relative to offline advertising on firm performance and firm value," International Journal of Research in Marketing, Elsevier, vol. 37(4), pages 789-804.

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