Research Commentary---Sponsored Search and Market Efficiency

Authors:
Vasant Dhar;Anindya Ghose
Affiliations:
Stern School of Business, New York University, New York, New York 10012;Stern School of Business, New York University, New York, New York 10012
Venue:
Information Systems Research
Year:
2010

Citing 7
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Abstract

Sponsored search is the mechanism whereby advertisers pay a fee to Internet search engines to be displayed alongside organic (nonsponsored) web search results. Based on prior literature, we draw an analogy between these markets and financial markets. We use the analogy as well as the key differences to present a theoretical framework consisting of a set of research questions about the pricing of keywords and design choices available to firms in sponsored search markets. These questions define an agenda for future research in sponsored search markets. They also have practical implications for advertisers and online marketplaces such as search engines and social media sites that support advertising.