Differential Effects of Keyword Selection in Search Engine Advertising on Direct and Indirect Sales

Forthcoming at Journal of Management Information Systems

42 Pages Posted: 7 Jun 2012 Last revised: 16 Sep 2013

See all articles by Xianghua Lu

Xianghua Lu

Fudan University - School of Management

Xia Zhao

University of North Carolina at Greensboro - Information Systems & Supply Chain Management

Date Written: August 31, 2013

Abstract

Product sales via sponsored keyword advertising on search engines rely on an effective selection of keywords that describe the offerings. In this study, we consider both the direct sales of the advertised products and indirect sales (i.e., cross-selling) of other products, and examine how specific keywords and general keywords influence these two types of sales differently. We also examine how the cross-selling effects may vary across different types of products (main products and accessories). Our results suggest that the use of specific keywords leans towards improving the direct sales of advertised products, while the use of general keywords leans towards improving the indirect sales of other products. The contribution of keywords to indirect sales is influenced by product type. For main products, the use of specific keywords generates a higher marginal contribution to indirect sales than that of general keywords. For accessory products, the use of general keywords generates a higher marginal contribution to indirect sales than that of specific keywords. The key implication of this study is that sellers focusing on different types of sales (direct or indirect sales) or products (main or accessory products) should consider using different types of keywords in search engine advertising to drive sales.

Keywords: Search Engine, Advertising, Cross Selling, Keywords Selection

Suggested Citation

Lu, Xianghua and Zhao, Xia, Differential Effects of Keyword Selection in Search Engine Advertising on Direct and Indirect Sales (August 31, 2013). Forthcoming at Journal of Management Information Systems. Available at SSRN: https://ssrn.com/abstract=2079025 or http://dx.doi.org/10.2139/ssrn.2079025

Xianghua Lu

Fudan University - School of Management ( email )

670 Handan Road
Shanghai
China

Xia Zhao (Contact Author)

University of North Carolina at Greensboro - Information Systems & Supply Chain Management ( email )

401 Bryan Building
Greensboro, NC 27402-6179
United States

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