ACM SIGIR Forum
Bayesian Statistics and Marketing
Marketing Science
Modeling the Clickstream: Implications for Web-Based Advertising Efforts
Marketing Science
Management Science
Dynamic Conversion Behavior at E-Commerce Sites
Management Science
An adaptive algorithm for selecting profitable keywords for search-based advertising services
EC '06 Proceedings of the 7th ACM conference on Electronic commerce
The comparative effectiveness of sponsored and nonsponsored links for Web e-commerce queries
ACM Transactions on the Web (TWEB)
INFORMS Journal on Computing
Factors relating to the decision to click on a sponsored link
Decision Support Systems
Comparing performance metrics in organic search with sponsored search advertising
Proceedings of the 2nd International Workshop on Data Mining and Audience Intelligence for Advertising
Marketing Science
Ex Ante Information and the Design of Keyword Auctions
Information Systems Research
The Race for Sponsored Links: Bidding Patterns for Search Advertising
Marketing Science
An analysis of the importance of the long tail in search engine marketing
Electronic Commerce Research and Applications
Research Commentary---Sponsored Search and Market Efficiency
Information Systems Research
Search Engine Advertising: Channel Substitution When Pricing Ads to Context
Management Science
A “Position Paradox” in Sponsored Search Auctions
Marketing Science
Cyclical Bid Adjustments in Search-Engine Advertising
Management Science
Editorial---People of Marketing Science
Marketing Science
Traditional and IS-Enabled Customer Acquisition on the Internet
Management Science
Research Note---Performance-Based Advertising: Advertising as Signals of Product Quality
Information Systems Research
Effects of the Presence of Organic Listing in Search Advertising
Information Systems Research
Budget optimization for online campaigns with positive carryover effects
WINE'12 Proceedings of the 8th international conference on Internet and Network Economics
The Role of Search Engine Optimization in Search Marketing
Marketing Science
Exploiting contextual factors for click modeling in sponsored search
Proceedings of the 7th ACM international conference on Web search and data mining
Electronic Commerce Research and Applications
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The phenomenon of paid search advertising has now become the most predominant form of online advertising in the marketing world. However, we have little understanding of the impact of search engine advertising on consumers' responses in the presence of organic listings of the same firms. In this paper, we model and estimate the interrelationship between organic search listings and paid search advertisements. We use a unique panel data set based on aggregate consumer response to several hundred keywords over a three-month period collected from a major nationwide retailer store chain that advertises on Google. In particular, we focus on understanding whether the presence of organic listings on a search engine is associated with a positive, a negative, or no effect on the click-through rates of paid search advertisements, and vice versa for a given firm. We first build an integrated model to estimate the relationship between different metrics such as search volume, click-through rates, conversion rates, cost per click, and keyword ranks. A hierarchical Bayesian modeling framework is used and the model is estimated using Markov chain Monte Carlo methods. Our empirical findings suggest that click-throughs on organic listings have a positive interdependence with click-throughs on paid listings, and vice versa. We also find that this positive interdependence is asymmetric such that the impact of organic clicks on increases in utility from paid clicks is 3.5 times stronger than the impact of paid clicks on increases in utility from organic clicks. Using counterfactual experiments, we show that on an average this positive interdependence leads to an increase in expected profits for the firm ranging from 4.2% to 6.15% when compared to profits in the absence of this interdependence. To further validate our empirical results, we also conduct and present the results from a controlled field experiment. This experiment shows that total click-through rates, conversions rates, and revenues in the presence of both paid and organic search listings are significantly higher than those in the absence of paid search advertisements. The results predicted by the econometric model are also corroborated in this field experiment, which suggests a causal interpretation to the positive interdependence between paid and organic search listings. Given the increased spending on search engine-based advertising, our analysis provides critical insights to managers in both traditional and Internet firms.