Sponsored Search Auctions: Research Opportunities in Marketing

Foundations and Trends in Marketing, Vol. 3: No 2, pp. 75-126

57 Pages Posted: 26 Mar 2009 Last revised: 30 Mar 2010

See all articles by Song Yao

Song Yao

Washington University in St. Louis - John M. Olin Business School

Carl F. Mela

Duke University - Fuqua School of Business

Date Written: March 12, 2009

Abstract

We systematically overview the literature in key word search and propose several promising research directions. The paper is organized by each agent in the search process: searchers, advertisers and the search engine, and reviews the key research issues for each. For each group, we outline the decision process involved in keyword search. For searchers, this involves what to search, where to search, which results to click, and when to exit search. For advertisers, this involves where to bid and which word or words to bid on, how much to bid and how searchers and auction mechanisms moderate these behaviors. The search engine faces choices on mechanism design, website design, and how much information to share with its advertisers and searchers. These choices have implications for customer lifetime value and the nature of competition between advertisers. Overall, we list a number of potential areas of future research arising from the decision processes of these various agents.

Keywords: Auction, Sponsored Search, Advertising, Marketing

Suggested Citation

Yao, Song and Mela, Carl F., Sponsored Search Auctions: Research Opportunities in Marketing (March 12, 2009). Foundations and Trends in Marketing, Vol. 3: No 2, pp. 75-126. Available at SSRN: https://ssrn.com/abstract=1367402

Song Yao (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

HOME PAGE: http://www.songyao.org

Carl F. Mela

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-7767 (Phone)

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