A Large-Scale Field Experiment to Evaluate the Effectiveness of Paid Search Advertising

21 Pages Posted: 4 Oct 2017 Last revised: 9 Oct 2017

Lorenzo Coviello

University of California, San Diego (UCSD)

Uri Gneezy

University of California, San Diego (UCSD) - Rady School of Management

Lorenz Goette

University of Lausanne; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 2017

Abstract

Companies spend billions of dollars online for paid links to branded search terms. Measuring the effectiveness of this marketing spending is hard. Blake, Nosko and Tadelis (2015) ran an experiment with eBay, showing that when the company suspended paid search, most of the traffic still ended up on its website. Can findings from one of the largest companies in the world be generalized? We conducted a similar experiment with Edmunds.com, arguably a more representative company, and found starkly different results. More than half of the paid traffic is lost when we shut off paid-links search. These results suggest money spent on search-engine marketing may be more effective than previously documented

Keywords: field experiments, search-engine marketing

JEL Classification: C93, D90

Suggested Citation

Coviello, Lorenzo and Gneezy, Uri and Goette, Lorenz, A Large-Scale Field Experiment to Evaluate the Effectiveness of Paid Search Advertising (September 2017). CEPR Discussion Paper No. DP12333. Available at SSRN: https://ssrn.com/abstract=3047319

Lorenzo Coviello (Contact Author)

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

Uri Gneezy

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

Lorenz F. Goette

University of Lausanne ( email )

Department of Economics
Batiment Internef
Lausanne, 1015
Switzerland
(021) 692'3496 (Phone)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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

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