Title: Consumer Heterogeneity and Paid Search Effectiveness: A Large-Scale Field Experiment
Abstract: EconometricaVolume 83, Issue 1 p. 155-174 Original Articles Consumer Heterogeneity and Paid Search Effectiveness: A Large-Scale Field Experiment Thomas Blake, Thomas Blake [email protected] eBay Research Labs, 2065 Hamilton Ave., San Jose, CA, 95125 U.S.A.Search for more papers by this authorChris Nosko, Chris Nosko [email protected] University of Chicago, 5807 South Woodlawn Ave., Chicago, IL, 60637 U.S.A. eBay Research Labs, 2065 Hamilton Ave., San Jose, CA, 95125 U.S.A.Search for more papers by this authorSteven Tadelis, Steven Tadelis [email protected] UC Berkeley, 2220 Piedmont Ave., Berkeley, CA, 94720-1900 U.S.A. NBER eBay Research Labs, 2065 Hamilton Ave., San Jose, CA, 95125 U.S.A. We are grateful to many eBay employees and executives who made this work possible. We thank Susan Athey, Randall Lewis, Justin Rao, David Reiley, Florian Zettelmeyer, an editor, and three anonymous referees for comments on earlier drafts. Search for more papers by this author Thomas Blake, Thomas Blake [email protected] eBay Research Labs, 2065 Hamilton Ave., San Jose, CA, 95125 U.S.A.Search for more papers by this authorChris Nosko, Chris Nosko [email protected] University of Chicago, 5807 South Woodlawn Ave., Chicago, IL, 60637 U.S.A. eBay Research Labs, 2065 Hamilton Ave., San Jose, CA, 95125 U.S.A.Search for more papers by this authorSteven Tadelis, Steven Tadelis [email protected] UC Berkeley, 2220 Piedmont Ave., Berkeley, CA, 94720-1900 U.S.A. NBER eBay Research Labs, 2065 Hamilton Ave., San Jose, CA, 95125 U.S.A. We are grateful to many eBay employees and executives who made this work possible. We thank Susan Athey, Randall Lewis, Justin Rao, David Reiley, Florian Zettelmeyer, an editor, and three anonymous referees for comments on earlier drafts. Search for more papers by this author First published: 18 February 2015 https://doi.org/10.3982/ECTA12423Citations: 202 AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Abstract Internet advertising has been the fastest growing advertising channel in recent years, with paid search ads comprising the bulk of this revenue. We present results from a series of large-scale field experiments done at eBay that were designed to measure the causal effectiveness of paid search ads. Because search clicks and purchase intent are correlated, we show that returns from paid search are a fraction of non-experimental estimates. As an extreme case, we show that brand keyword ads have no measurable short-term benefits. For non-brand keywords, we find that new and infrequent users are positively influenced by ads but that more frequent users whose purchasing behavior is not influenced by ads account for most of the advertising expenses, resulting in average returns that are negative. Citing Literature Volume83, Issue1January 2015Pages 155-174 RelatedInformation