Over-Paid Search: When Bricks-and-Mortar Retailers Should Not Use Paid Search

Current research on paid search highlights its ability to enhance online as well as offline sales but is limited to pure online players and multi-channel firms. This paper presents a controlled field experiment which investigates whether paid search can increase sales for bricks-and-mortar retailers who solely sell their products via local stores and rely on informational websites to reach their customers. Results suggest that paid search increases the number of potential customers by enhancing the reach of online marketing initiatives. Yet, using a difference-in-differences analysis, our findings show that paid search fails to increase offline sales. Local store customers primarily use paid search as a navigational shortcut to the chain’s website which they would have reached even without being exposed to paid search. Consequently, bricks-and-mortar retailers should approach paid search cautiously: whilst it can enhance the reach of marketing initiatives, it seems to have little effect on improving offline purchases

Achieving more by saying less? On the Moderating Effect of Information Cues in Paid Search

Research on ad copy design is well-studied in the context of offline marketing. However, researchers have only recently started to investigate ad copies in the context of paid search, and have not yet explored the potential of information cues to enhance customers’ search process. In this paper we analyze the impact of an information cue on user behavior in ad copies. Contrary to prevalent advice, results suggest that reducing the number of words in an ad is not always beneficial. Users act quite differently (and unexpectedly) in response to an information cue depending on their search phrases. In turn, practitioners could leverage the observed moderating effect of an information cue to enhance paid search success. Furthermore, having detected deviating user behavior in terms of clicks and conversions, we provide first indicative evidence of a self-selection mechanism at play when paid search users respond to differently phrased ad copies

You can\u27t buy my rating! On the pivotal effect of an unconditional gift on rating behavior

The importance of online ratings on sales is widely acknowledged. Firms need to find ways of increasing the number of ratings and rating scores, but how they can achieve this effectively is less well established. In this paper we analyze the impact of an unconditional gift on customers’ rating behavior in an online field experiment. Contrary to prevalent advice, our results suggest that providing a gift is not necessarily beneficial. Younger customers are significantly less likely to rate when exposed to an unconditional gift. Regression analysis reveals that age serves as a moderator and older customers even respond slightly positive to a gift. Having detected a negative effect of gifts on rating behavior provides first indicative evidence of a possible crowding out of intrinsic motivation in the context of online ratings. This has direct implications for practitioners considering the usage of gifts to elicit online ratings

Against all odds: Tentative steps toward efficient information sharing in groups

When groups face difficult problems, the voices of experts may be lost in the noise of others’ contributions. We present results from a “naturally noisy” setting, a large first-year undergraduate class, in which the expert’s voice was “lost” to such a degree that bringing forward even more inferior information was optimal. A single individual had little chance to improve the outcome and coordinating with the whole group was impossible. In this setting, we examined the change in behavior before and after people could talk to their neighbors. We found that the number of people who reduced noise by holding back their information strongly and significantly increased

Consumer responses to paid search : empirical evidence from a bricks-and-mortar retailer

Suchmaschinenmarketing (Paid Search) stellt eines der beliebtesten Online-Werbeinstrumente dar. In den vergangenen Jahren entstanden vielfältige Forschungsarbeiten, welche Suchmaschinenmarketing aus einer wissenschaftlichen Perspektive analysieren. Trotz der hohen wissenschaftlichen Aufmerksamkeit analysiert die aktuelle Literatur vorrangig die Auswirkungen des Suchmaschinenmarketings auf Einkäufe über den Online-Kanal. Die aktuelle Forschung exkludiert Händler, die ihre Produkte ausschließlich über lokale Geschäfte verkaufen und in Suchmaschinenmarketing investieren, um Verbraucher während der Suchphase zu erreichen. Dementsprechend ist das Hauptziel dieser Dissertation, das Verständnis dafür zu verbessern, wie der stationäre Handel Suchmaschinenmarketing effizient einsetzen kann. Diese Dissertation umfasst sechs Forschungsarbeiten. Zunächst beurteile ich den aktuellen Stand der Literatur in einer systematischen Literaturrecherche, aus der ich empirische Verallgemeinerungen für eine zukünftige Forschungsagenda ableite (Schlangenotto et al. 2018a). Basierend auf dieser Überprüfung konzentrieren sich die folgenden fünf empirischen Arbeiten auf die wichtigsten Entscheidungen, mit denen jeder Einzelhändler konfrontiert ist, wenn dieser in Suchmaschinenmarketing investieren will. Die empirischen Beiträge untersuchen, ob Einzelhändler in Suchmaschinenmarketing investieren sollten (Schlangenotto et al. 2018b; Schlangenotto 2018), welche Suchanfragen sie kaufen sollten (Schlangenotto und Kundisch 2017), wo sie ihre Anzeigen auf einer Suchergebnisseite platzieren sollten (Schlangenotto et al. 2017) und wie sie ihre Anzeigen formulieren sollten (Schlangenotto und Kundisch 2016).As of today, paid search is one of the most popular online advertising instruments. As such, paid search has received a high degree of scholarly interest especially in the fields of Information Systems and Marketing. However, despite this high level of scholarly attention, the current body of literature primarily analyses the impact of paid search on purchases made via the online channel. Surprisingly, the current literature lacks any research on bricks-and-mortar retailers who sell their products solely via their local stores and invest in paid search to reach consumers during their search phase. Considering that bricks-and-mortar retailers still represent one third of all retailers, this represents a blatant gap in the literature. Accordingly, the main goal of this dissertation is to enhance understanding of how bricks-and-mortar retailers should approach paid search.This dissertation comprises six research papers. First, I assess the current state of the literature in a systematic literature review in regard to paid search, from which I derive empirical generalizations to outline a future research agenda (Schlangenotto et al. 2018a). Based on this review, the subsequent five empirical papers focus on the main decisions that every bricks-and-mortar retailer faces when approaching paid search. Each paper explores one of the core questions, respectively, whether bricks-and-mortar retailers should invest in paid search (Schlangenotto et al. 2018b; Schlangenotto 2018), which search requests they should buy (Schlangenotto and Kundisch 2017), where they should place their ads on a SERP (Schlangenotto et al. 2017) and how they should phrase their ads (Schlangenotto and Kundisch 2016).von Darius Schlangenotto ; supervisor: Prof. Dr. Dennis Kundisch, Prof. Dr. Nancy WünderlichTag der Verteidigung: 04.05.2018Universität Paderborn, Dissertation, 201

ACHIEVING MORE BY PAYING LESS? HOW RETAILERS CAN BENEFIT BY BIDDING LESS AGGRESSIVELY IN PAID SEARCH AUCTIONS

Current research on paid search highlights its ability to enhance online as well as offline conversions. Yet, research investigating the impact of placing paid search ads on less prominent positions on subsequent consumer behavior is limited to the online environment. This paper presents a controlled field experiment which investigates whether the targeting of a less prominent ad position can be beneficial for bricks-and-mortar retailers who sell their products via local stores. Preliminary Results indicate that paid search advertising budgets could be allocated more efficiently by targeting less prominent ad positions, thus allowing a bricks-and-mortar retailer with a limited marketing budget to increase the reach of their marketing campaign, attract more consumers to its website and achieve an overall in-crease in conversions. These findings illustrate that search theory continues to apply in the realm of paid search and that different consumer types are likely to click on differently positioned ads. Advertisers could leverage this behavior to reach preferred types of customers by targeting specific ad positions. Bricks-and-mortar retailers could consider targeting less prominent ad positions when seeking to reduce advertising costs while simultaneously extending their reach to customers and achieve an increase in conversions

READ THIS PAPER! A FIELD EXPERIMENT ON THE ROLE OF A CALL-TO-ACTION IN PAID SEARCH

Current research on ad copy design in the context of paid search highlights in particular the integration of an explicit call-to-action in the last part of the ad. Research on this topic is in its infancy and, so far, has only investigated click-through-rates rather than conversions. This paper considers conversion rates in ad copy design by examining the impact of a call-to-action on user behavior, conducted in a field experiment. Contrary to prevalent advice in the industry, our research shows that a call-to-action does not necessarily enhance paid search performance. Using logistic regression we identify a phrasing scheme which minimizes costs (clicks) while simultaneously maximizing profits (conversions) for adver-tisers. The diametric user behavior we observe provides first indicative evidence of a self-selection mechanism at play when paid search users respond to differently phrased ad copies. Future research in the field of paid search with regard to ad copy design should be cognizant of our findings

What Drives Paid Search Success? A Systematic Literature Review

Whilst paid search has received much scholarly attention across various research fields, the findings have not yet been synthesized. As user behavior in paid search is influenced by such a wide range of factors, synthesizing the findings would, however, avoid ‘omitted variable biases’. In our systematic literature review we analyzed over 1,000 sources and identified 34 relevant research papers. These are organized around the three main decisions every advertiser faces when approaching paid search: which keywords to use, which ad positions to target, and how to craft ad copies. We then draw out empirical generalizations and outline a research agenda. In particular, we propose a research framework that researchers and practitioners alike can employ to avoid the risk of omitting variables when analyzing the success factors of paid search

Achieving More by Paying Less? How Bricks-and-Mortar Retailers Can Benefit by Bidding Less Aggressively in Paid Search

Current research on paid search highlights its ability to enhance both online and offline conversions. Yet, research investigating the impact of placing paid search ads on less prominent positions on subsequent consumer behavior is limited to the online environment. This paper presents a field experiment using differences-in-differences analysis to investigate whether the targeting of a less prominent ad position can be beneficial for bricks-and-mortar retailers. Results indicate that paid search advertising budgets could be allocated more efficiently by targeting less prominent ad positions, thus allowing bricks-and-mortar retailers with a limited marketing budget to increase the reach of their marketing campaign, attract more consumers to their website and achieve an overall increase in conversions. Furthermore, the pay-per-click billing mechanism allows advertisers to increase their marketing reach at no additional cost. Consequently, bricks-and-mortar retailers should consider targeting less prominent ad positions to reduce advertising costs while simultaneously enhancing advertising benefits