Online advertisement morphing : empirical and strategic implications

Thesis (S.M.)--Massachusetts Institute of Technology, Sloan School of Management, 2010.Cataloged from PDF version of thesis.Includes bibliographical references (p. 100-103).Today's age of information centric globalization over the Internet requires customer awareness by not only good content communication, but also trust and empathy. Trust and Empathy can be generated only when the sellers understand customers. This is only possible when sellers are aware about how the customers conceive the advertisement presented to them over the web. Fortunately, this knowledge is facilitated by analyzing customer buying behaviour and understanding the cognitive behaviour of the customer using cognitive engines, stochastic measures and analytics. My research will focus towards empirical substantiation of the affects and implications of Morphing. The study includes methodologies that corporate world can formulate to develop strategic measures to target potential customers based on individual cognitive styles. The study also includes an analysis of the online advertising industry trends, interviews & perspectives of industry thought leaders, and business models of the future.by Nabeel A. Siddiqui.S.M

The Economics of Click Fraud

Click fraud is a substantial threat in the cyberworld. Here, the author examines the contexts, mechanisms, and processes associated with the click-fraud industry from an economics viewpoint. The nature of electronic channels, characterized by asymmetric hypermediation, provides a fertile ground for such fraud. Click fraud is arguably the cyberworld's biggest scam. Illegitimate clicks on pay-per-click (PPC) advertisements have rekindled debate about online advertising's effectiveness. Cybercriminals involved in diverse activities are expanding their operations into lucrative businesses in the PPC industry. At the heart of the click-fraud problem is the fact that site owners benefit from clicks made to ads on their sites. Search engine network partners, competitors, and unhappy employees can all generate illegitimate clicks. Here, I examine the contexts, mechanisms, and processes associated with the click-fraud industry from an economics viewpoint

"Data-driven digital advertising: benefits and risks of online behavioral advertising"

Purpose – The research aims to investigate how individuals can be persuaded to make purchases through repeated and personalized messages. Specifically, the study proposes a framework of the potential benefits and risks of the online behavioral and data-driven digital advertising (OBA), which can help researchers and practitioners to better understand shopping behavior in the online retailing setting. In addition, the research focuses on the role of privacy concerns in affecting avoidance or adoption of OBA. Design/methodology/approach – The authors apply a structural equation modeling (SEM) approach with partial least square (PLS) regression method to test the research hypotheses through data coming from a structured questionnaire. Findings – OBA is a controversial type of advertising that activates opposing reactions on consumers’perspective. Specifically, acceptance of the OBA is positively related to relevance, usefulness and credibility of the personalized advertisements, while the intention to avoid personalized ads is strictly related to the privacy concerns. Consequently, OBA acceptance and avoidance affected the click intention on the ad and the behavioral intention that are decisive for the success of data-driven digital advertising. Originality/value – Prior research came up with complex theoretical frameworks that explain antecedents of OBA focusing only on ethical issues in marketing, on the effectiveness of a single OBA campaign or on how to create a successful advertising campaign. However, no study focuses on the intended or actual behavior of shoppers. Specifically, filling the gap in the existing literature, our research applies an SEM approach to identify both benefits and risks and the antecedents of the actual behavior of individuals in terms of actual purchases promoted by OBA

An Empirical Analysis of Search Engine Advertising: Sponsored Search in Electronic Markets

The phenomenon of sponsored search advertising—where advertisers pay a fee to Internet search engines to be displayed alongside organic (nonsponsored) Web search results—is gaining ground as the largest source of revenues for search engines. Using a unique six-month panel data set of several hundred keywords collected from a large nationwide retailer that advertises on Google, we empirically model the relationship between different sponsored search metrics such as click-through rates, conversion rates, cost per click, and ranking of advertisements. Our paper proposes a novel framework to better understand the factors that drive differences in these metrics. We use a hierarchical Bayesian modeling framework and estimate the model using Markov Chain Monte Carlo methods. Using a simultaneous equations model, we quantify the relationship between various keyword characteristics, position of the advertisement, and the landing page quality score on consumer search and purchase behavior as well as on advertiser\u27s cost per click and the search engine\u27s ranking decision. Specifically, we find that the monetary value of a click is not uniform across all positions because conversion rates are highest at the top and decrease with rank as one goes down the search engine results page. Though search engines take into account the current period\u27s bid as well as prior click-through rates before deciding the final rank of an advertisement in the current period, the current bid has a larger effect than prior click-through rates. We also find that an increase in landing page quality scores is associated with an increase in conversion rates and a decrease in advertiser\u27s cost per click. Furthermore, our analysis shows that keywords that have more prominent positions on the search engine results page, and thus experience higher click-through or conversion rates, are not necessarily the most profitable ones—profits are often higher at the middle positions than at the top or the bottom ones. Besides providing managerial insights into search engine advertising, these results shed light on some key assumptions made in the theoretical modeling literature in sponsored search

Online Tracking: When Does it Become Stalking?

Online user activities are tracked for many purposes. In e-commerce, cross-domain tracking is used to quantify and pay for web-tra±c generation. Our previous research studies have shown that HTTP cookie-based tracking process, though reliable, can fail due to technical reasons, as well as through fraudulent manipulation by tra±c generators. In this research study, we evaluate which of the previously published tracking mechanisms are still functional. We assess the e±cacy and utility of those methods to create a robust tracking mechanism for e-commerce. A failsafe and robust tracking mechanism does not need to translate into further privacy intrusions. Many countries are rushing to introduce new regulations, which can have a negative impact on the development of robust technologies in an inherently stateless eco-system. We used a multi-domain, purpose-built simulation environment to experiment common tracking scenarios, and to describe the parameters that de¯ne the minimum tracking requirement use-cases, and practices that result in invading privacy of users. This study will help practitioners in their implementations, and policy developers and regulators to draw up policies that would not curtail the development of robust tracking technologies that are needed in e-commerce activities, while safeguarding the privacy of internet users.fals

An Empirical Analysis of Search Engine Advertising: Sponsored Search and Cross-Selling in Electronic Markets

The phenomenon of sponsored search advertising – where advertisers pay a fee to Internet search engines to be displayed alongside organic (non-sponsored) web search results – is gaining ground as the largest source of revenues for search engines. Using a unique panel dataset of several hundred keywords collected from a large nationwide retailer that advertises on Google, we empirically model the relationship between different metrics such as click-through rates, conversion rates, bid prices and keyword ranks. Our paper proposes a novel framework and data to better understand what drives these differences. We use a Hierarchical Bayesian modeling framework and estimate the model using Markov Chain Monte Carlo (MCMC) methods. We empirically estimate the impact of keyword attributes on consumer search and purchase behavior as well as on firms’ decision-making behavior on bid prices and ranks. We find that the presence of retailer-specific information in the keyword increases click-through rates, and the presence of brand-specific information in the keyword increases conversion rates. Our analysis provides some evidence that advertisers are not bidding optimally with respect to maximizing the profits. We also demonstrate that as suggested by anecdotal evidence, search engines like Google factor in both the auction bid price as well as prior click-through rates before allotting a final rank to an advertisement. Finally, we conduct a detailed analysis with product level variables to explore the extent of cross-selling opportunities across different categories from a given keyword advertisement. We find that there exists significant potential for cross-selling through search keyword advertisements. Latency (the time it takes for consumer to place a purchase order after clicking on the advertisement) and the presence of a brand name in the keyword are associated with consumer spending on product categories that are different from the one they were originally searching for on the Internet

Deficiencies in online privacy policies : factors and policy recommendations

Thesis (S.M. in Technology and Policy)--Massachusetts Institute of Technology, Engineering Systems Division, Technology and Policy Program, 2010.Cataloged from PDF version of thesis.Includes bibliographical references (p. 111-121).Online service providers (OSPs) such as Google, Yahoo!, and Amazon provide customized features that do not behave as conventional experience goods. Absent familiar metaphors, unraveling the full. scope and implications of attendant privacy hazards requires technical knowledge, creating information asymmetries for casual users. While a number of information asymmetries are proximately rooted in the substantive content of OSP privacy policies, the lack of countervailing standards guidelines can be traced to systemic failures on the part of privacy regulating institutions. In particular, the EU Data Protection Directive (EU-DPD) and the US Safe Harbor Agreement (US-SHA) are based on comprehensive norms, but do not provide pragmatic guidelines for addressing emerging privacy hazards in a timely manner. The dearth of substantive privacy standards for behavioral advertising and emerging location-based services highlight these gaps. To explore this problem, the privacy policies of ten large OSPs were evaluated in terms of strategies for complying with the EU-DPD and US-SHA and in terms of their role as tools for enabling informed decision-making. Analysis of these policies shows that OSPs do little more than comply with the black letter of the EU-DPD and USSHA. Tacit data collection is an illustrative instance. OSP privacy policies satisfice by acknowledging the nominal mechanisms behind tacit data collection supporting services that "enhance and customize the user experience," but these metaphors do not sufficiently elaborate the privacy implications necessary for the user to make informed choices. In contrast, privacy advocates prefer "privacy and surveillance" metaphors that draw users attention away from the immediate gratification of customized services. Although OSPs do bear some responsibility, neither the EU-DPD nor the US-SHA provide the guidance or incentives necessary to develop more substantive privacy standards. In light of these deficiencies, this work identifies an alternative, collaborative approach to the design of privacy standards. OSPs often obscure emerging privacy hazards in favor of promoting innovative services. Privacy advocates err on the other side, giving primacy to "surveillance" metaphors and obscuring the utility of information based services. Rather than forcing users to unravel the conflicting metaphors, collaborative approaches focus on surfacing shared concerns. The collaborative approach presented here attempts to create a forum in which OSPs, advertisers, regulators, and civil society organizations contribute to a strategic menu of technical and policy options that highlight mutually beneficial paths to second best solutions. Particular solutions are developed through a process of issue (re)framing focused on identifying common metaphors that highlight shared concerns, reduce overall information asymmetries, and surface the requirements for governance and privacy tools that address emerging risks. To illustrate this reframing process, common deficiencies identified in the set of privacy policies are presented along with strategic options and examples of potential reframings.by Jesse H. Sowell, II.S.M.in Technology and Polic

Can Upward Brand Extensions be an Opportunity for Marketing Managers During the Covid-19 Pandemic and Beyond?

Early COVID-19 research has guided current managerial practice by introducing more products across different product categories as consumers tried to avoid perceived health risks from food shortages, i.e. horizontal brand extensions. For example, Leon, a fast-food restaurant in the UK, introduced a new range of ready meal products. However, when the food supply stabilised, availability may no longer be a concern for consumers. Instead, job losses could be a driver of higher perceived financial risks. Meanwhile, it remains unknown whether the perceived health or financial risks play a more significant role on consumers’ consumptions. Our preliminary survey shows perceived health risks outperform perceived financial risks to positively influence purchase intention during COVID-19. We suggest such a result indicates an opportunity for marketers to consider introducing premium priced products, i.e. upward brand extensions. The risk-as�feelings and signalling theories were used to explain consumer choice under risk may adopt affective heuristic processing, using minimal cognitive efforts to evaluate products. Based on this, consumers are likely to be affected by the salient high-quality and reliable product cue of upward extension signalled by its premium price level, which may attract consumers to purchase when they have high perceived health risks associated with COVID-19. Addressing this, a series of experimental studies confirm that upward brand extensions (versus normal new product introductions) can positively moderate the positive effect between perceived health risks associated with COVID-19 and purchase intention. Such an effect can be mediated by affective heuristic information processing. The results contribute to emergent COVID-19 literature and managerial practice during the pandemic but could also inform post-pandemic thinking around vertical brand extensions

An Empirical Analysis of Search Engine Advertising: Sponsored Search and Cross-Selling in Electronic Markets

The phenomenon of sponsored search advertising – where advertisers pay a fee to Internet search engines to be displayed alongside organic (non-sponsored) web search results – is gaining ground as the largest source of revenues for search engines. Using a unique panel dataset of several hundred keywords collected from a large nationwide retailer that advertises on Google, we empirically model the relationship between different metrics such as click-through rates, conversion rates, bid prices and keyword ranks. Our paper proposes a novel framework and data to better understand what drives these differences. We use a Hierarchical Bayesian modeling framework and estimate the model using Markov Chain Monte Carlo (MCMC) methods. We empirically estimate the impact of keyword attributes on consumer search and purchase behavior as well as on firms’ decision-making behavior on bid prices and ranks. We find that the presence of retailer-specific information in the keyword increases click-through rates, and the presence of brand-specific information in the keyword increases conversion rates. Our analysis provides some evidence that advertisers are not bidding optimally with respect to maximizing the profits. We also demonstrate that as suggested by anecdotal evidence, search engines like Google factor in both the auction bid price as well as prior click-through rates before allotting a final rank to an advertisement. Finally, we conduct a detailed analysis with product level variables to explore the extent of cross-selling opportunities across different categories from a given keyword advertisement. We find that there exists significant potential for cross-selling through search keyword advertisements. Latency (the time it takes for consumer to place a purchase order after clicking on the advertisement) and the presence of a brand name in the keyword are associated with consumer spending on product categories that are different from the one they were originally searching for on the Internet

WWW visibility in marketing

Abstract. Social media is a vital channel for marketers nowadays. Customers are more empowered today than ever before and the Internet is accelerating the trend toward greater customer empowerment. In few years Web 2.0 has become a highly important media and it has changed the Web into platform where individuals can communicate, assemble and organize data. Web 2.0 also offers a variety of different “tools” for companies to be used in marketing. Because companies and products are visible and discussed in social media, it is recommendable that companies try to seek positive publicity in these media. Thesis aims to describe the opportunities social media provides in organizational use, as well as, to provide an overview of the current situation in social media utilization in Finland. Further, it seeks to investigate the challenges organizations have in social media or in a whole field of E-marketing, and what kind of plans organizations have for the future in a field of E-marketing. The study consists of theoretical and empirical parts. Literature part scrutinizes the literature that covers different sides of online marketing. Empirical part of the study was conducted as a survey research. Results are based on a questionnaire and interviews that were conducted among Finnish companies during time period of spring and autumn 2012. The data was gathered among companies operating in different fields of business. Interviews were transcribed and conclusions were made from those. Because of the limited number of participants that took part to the questionnaire, the results derived from it are merely suggestive. Nevertheless, interviews did strengthen the understanding that was inherited from the questionnaire. The findings reveal that e-marketing has a very important role in the companies’ marketing strategy. Majority of the firms see social media marketing as a positive thing. Yet, the companies were unsure whether they possess the needed skills to do marketing in social media effectively. The results imply that the reason for this is related to the skills and experience the companies have in social media marketing. Those are such issues though, that company will learn and will develop its own way to use social media. This was also showed in the results.Tiivistelmä. Sosiaalinen media on tärkeä markkinointikanava nykypäivänä. Kuluttajilla on nykyään enemmän mahdollisuuksia vaikuttaa kuin koskaan ennen, minkä lisäksi Internet tarjoaa yhä kasvavassa määrin vaikuttamiskeinoja. Muutamassa vuodessa Web 2.0:sta on tullut erittäin tärkeä media, joka on muuttanut Internetin alustaksi, jossa ihmiset voivat kommunikoida sekä koota ja järjestää tietoa. Web 2. tarjoaa useita ”työkaluja” myös yrityksille käytettäväksi markkinoinnissa. Koska yritykset ja tuotteet ovat näkyvissä ja keskustelun kohteena sosiaalisissa medioissa, on suositeltavaa, että yritykset yrittävät hakea positiivista julkisuutta näissä medioissa. Tämä pro gradu -tutkielma pyrkii kuvailemaan mahdollisuuksia, joita sosiaalinen media tarjoaa organisaatioille, minkä lisäksi se tarjoaa yleiskuvan sosiaalisen median hyödyntämisestä Suomessa. Lisäksi tavoitteena on selvittää haasteita, joita organisaatioilla on sosiaalisessa mediassa tai laajemmin sähköisessä kaupankäynnissä, sekä selvittää yritysten tulevaisuuden visioita sähköiselle kaupankäynnille. Tämä työ koostuu kirjallisuuteen perustuvasta teoriaosuudesta sekä empiirisestä osuudesta. Kirjallisuusosuus tarjoaa laajan katsauksen tieteelliseen kirjallisuuteen verkkomarkkinoinnin eri puolilta. Työn empiiristä osuutta varten järjestettiin survey-tutkimus. Tulokset perustuvat kyselytutkimukseen ja haastatteluihin, jotka suoritettiin suomalaisten yritysten piirissä kevään ja syksyn 2012 välisenä aikana. Data kerättiin yrityksiltä, jotka edustivat eri toimialoja. Haastattelut litteroitiin ja päätelmät tehtiin niistä. Koska kyselyyn osallistuneiden yritysten määrää jäi rajalliseksi, kyselystä saadut tulokset ovat lähinnä suuntaa antavia. Siitä huolimatta, suoritetut haastattelut vain vahvistivat kuvaa, joka saatiin kyselystä. Tuloksista ilmenee, että sähköinen markkinointi on tärkeä osa yritysten markkinointistrategiaa. Suurin osa yrityksistä näkee sosiaalisessa mediassa tapahtuvan markkinoinnin positiivisena asiana. Kuitenkin yritykset olivat epävarmoja siltä, osaavatko he tehdä tehokasta markkinointia sosiaalisessa mediassa. Tulokset näyttävät, että epävarmuuden syy löytyy yritysten rajallisesta osaamisesta ja kokemuksesta sosiaalisen median markkinoinnin alueella. Nämä ovat tietenkin asioita, jotka yritys oppii ajan kuluessa ja joissa se kokemuksen karttuessa löytää oman, itselleen sopivan tavan toimia. Tämä tuli näytetyksi myös tuloksissa