KOREASCHOLAR

Sponsored search advertising is the largest form of the Internet advertising in terms of advertising expenditure. Although researchers have studied various issues in the sponsored search advertising, they have mainly focused on managing each keyword separately without considering the relationship between different keyword queries. However, this is not consistent with the industry practice, and fails to account for the consumers’ search patterns. Online retailers carry various brands and products from competing manufacturers and their advertising strategy needs to include multiple keywords consistent to their product line. Similarly, consumers sequentially search and click on a number of different keywords at different stages of their decision journey. While it is important to understand advertisers’ bidding strategy and consumers’ search behavior in an integrated manner, the previous research in marketing has less explored the interplay between advertisers bids and consumer searches in a multiple keyword setting. We address these issues and offer practical implications on how advertisers should optimally and simultaneously bid on multiple keywords, incorporating consumers click behavior on multiple keywords. This study empirically examines the relationships between consumers’ clicks and online retailers’ bidding strategy on multiple keywords of competing manufacturer brands of 242 retailers. Our data contain daily information of the most popular keywords in a running shoes category on different search advertising metrics. Based on the consumer decision journey and purchase funnel framework, we classify the keywords into different groups following a hierarchical structure of the generic, brands, and models levels and examine the relationships between different keyword groups. Our main findings show that consumers usually click on multiple keywords of each manufacturer brand in a manner consistent with the consumer decision journey or purchase funnel framework, and that consumers are less likely to click on keywords across competing brands. However, online retailers’ bidding pattern is different from consumers’ click behavior in that they simultaneously bid on multiple keywords of competing manufacturer brands at the different hierarchy levels. In sum, our results provide online retailers useful insights to improve their keyword management practice, based on the relationship we identified on the consumer clicks and advertiser bids.

• Alex Jiyoung Kim(Ewha Womans University, Republic of Korea)
• Sungha Jang(Kansas State University, USA)
• Hyun S. Shin(Hanyang University, Republic of Korea)