Advertising as Information for Ranking E-Commerce Search Listings

44 Pages Posted: 2 Aug 2021 Last revised: 31 May 2023

See all articles by Joonhyuk Yang

Joonhyuk Yang

University of Notre Dame - Mendoza College of Business

Navdeep S. Sahni

Stanford Graduate School of Business

Harikesh Nair

Stanford University - Graduate School of Business

Xi Xiong

affiliation not provided to SSRN

Date Written: May 17, 2023

Abstract

Search engines and e-commerce platforms have substantial difficulty exposing new products to their users on account of an information problem: new products typically do not have enough sales or other user-engagement that enables platforms to reliably assess product quality. This paper evaluates the role of advertising in providing information to the platform regarding new product quality so as to solve this "cold-start" problem and to engineer higher quality organic listings. Using a large-scale experiment implemented at JD.com---a large e-commerce platform in China---we show that using ad propensity information for ranking new products benefits both the platform and consumers. Our findings showcase a new channel by which advertising can potentially improve outcomes for consumers and platforms in e-commerce, through its ability to reveal information that can be used by platforms to improve search ranking algorithms.

Keywords: Advertising as information, Search engines, New products, Platform businesses, E-Commerce, Field-experiments

JEL Classification: M37, D82, D83, C93

Suggested Citation

Yang, Joonhyuk and Sahni, Navdeep S. and Nair, Harikesh and Xiong, Xi, Advertising as Information for Ranking E-Commerce Search Listings (May 17, 2023). Stanford University Graduate School of Business Research Paper, Available at SSRN: https://ssrn.com/abstract=3895782 or http://dx.doi.org/10.2139/ssrn.3895782

Joonhyuk Yang (Contact Author)

University of Notre Dame - Mendoza College of Business ( email )

Notre Dame, IN 46556-5646
United States

Navdeep S. Sahni

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Harikesh Nair

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-736-4256 (Phone)

HOME PAGE: http://faculty-gsb.stanford.edu/nair/index.html

Xi Xiong

affiliation not provided to SSRN

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