Keyword Characteristics and Performance of Paid Search Campaigns

Journal of Interactive Marketing (Forthcoming)

47 Pages Posted: 4 Jul 2014 Last revised: 7 Jul 2014

See all articles by Sebastian Klapdor

Sebastian Klapdor

Technische Universität München (TUM) - TUM School of Management

Eva Anderl

University of Passau

Florian V. Wangenheim

ETH Zurich; ETH Zürich - Department of Management, Technology, and Economics (D-MTEC)

Jan Hendrik Schumann

University of Passau

Date Written: July 4, 2014

Abstract

Despite its importance for both e-commerce and traditional offline vendors, managing paid search campaigns is often based on trial and error. In particular, neither research nor practice has extensively addressed identifying relevant keywords and setting appropriate matching options. The authors develop a model based on a keyword’s intrinsic and extrinsic information content to shed light on how keyword characteristics affect campaign performance. Intrinsic information includes linguistic aspects and user- and content-related features, which can be indirectly changed through extrinsic information such as matching options. Using an advertiser-level data set from multiple industries, this study evaluates the impact of these criteria on click-through and conversion rates. The authors find that the query variation index, which measures whether a keyword contains sufficient information to identify a user’s information need correctly, is an effective predictor of keyword performance. Moreover, they show that the relationship between two of the main predictors, namely, query variation and advertiser names, and a keyword’s performance is moderated by the advertiser’s choice of matching options.

Keywords: Online advertising, Search engine marketing, Click-through rates, Conversion rates, Search queries, Electronic commerce, Query variation index, Information retrieval, Empirical research

Suggested Citation

Klapdor, Sebastian and Anderl, Eva and Wangenheim, Florian V. and Schumann, Jan Hendrik, Keyword Characteristics and Performance of Paid Search Campaigns (July 4, 2014). Journal of Interactive Marketing (Forthcoming), Available at SSRN: https://ssrn.com/abstract=2462396

Sebastian Klapdor

Technische Universität München (TUM) - TUM School of Management ( email )

Freising
Germany

Eva Anderl (Contact Author)

University of Passau ( email )

Innstrasse 27
Passau, D-94032
Germany

HOME PAGE: http://www.wiwi.uni-passau.de/marketing-innovation.html

Florian V. Wangenheim

ETH Zurich ( email )

Weinbergstrasse 56
Zurich, 8092
Switzerland
41-44-632 6924 (Fax)

HOME PAGE: http://www.techmarketing.ethz.ch/

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC) ( email )

Zurich
Switzerland

Jan Hendrik Schumann

University of Passau ( email )

Wirtschaftswissenschaftliche Fakultaet
Passau, D-94030
Germany

HOME PAGE: http://www.wiwi.uni-passau.de/marketing-innovation.html

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