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Empirical Analysis of Search Advertising Strategies Empirical Analysis of Search Advertising Strategies

Empirical Analysis of Search Advertising Strategies - PowerPoint Presentation

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Empirical Analysis of Search Advertising Strategies - PPT Presentation

Bhanu C Vattikonda Vacha dave Saikat Guha Alex C Snoeren Organic results Sponsored results Query 2 Huge and growing industry 20 3 Source IABPwC Internet Ad Revenue reports ID: 447167

advertising brand advertiser search brand advertising search advertiser nab cost strategy organic conversions conversion click advertise advertisers campaign strategies

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Presentation Transcript

Slide1

Empirical Analysis of Search Advertising Strategies

Bhanu C. Vattikonda, Vacha dave, Saikat Guha, Alex C. SnoerenSlide2

Organic

results

Sponsored

results

Query

2Slide3

Huge and growing industry

20%

3Source:

IAB/PwC Internet Ad Revenue reportsSlide4

Organic

SponsoredSlide5

Brand Ad

Competitor Ad

Are common advertising strategies profitable?Slide6

Metrics for campaign analysis

Click-through-rate (CTR)Measures ability to attract users but not quality of usersCost per acquisition (CPA) or cost per conversion:Does not capture profitability (e.g., in case of organic results)

Profit-per-impressionRequires access to sensitive financial information from advertisersSlide7

User Flow

7

Search impression

ConversionSlide8

Search engine

dataUser click information Cost of a particular advertising strategyNumber of conversions that an advertiser receives

8

How much is a conversion worth to the advertiser?Slide9

Value of a conversion

Advertisers specify bid value for an adIndicates how much they are willing to spendWe assume that advertisers are rational and want overall advertising to be profitable

Value of a converison,

 

9

 Slide10

Net acquisition benefit (NAB)

We introduce a new metric--NAB--captures profitability of a particular strategyAdvertiser spends

on a particular strategy Leads to

conversions is value of a conversion

Profitability

, normalized for impressions

 

10Slide11

Computing NAB

Computing NAB for a strategy requires:

Conversions

Cost of the ad strategy

Value of a conversion (

)

 

11Slide12

Comparing ad strategies

Compute NAB for each advertising strategy Compare NAB to see which ad strategy is more profitable If

then strategy

is better than

 

12Slide13

Common ad strategies we analyze

Cannibalization Advertising for own brand namePoaching Advertising for a competitors brand name Mobile ad extensions Using ad extensions (e.g., call extension) on mobile devicesSlide14

Organic

SponsoredSlide15

Search engine

datasetMonth long click log data from a search engine Billions of clicksMillions of ads Conversions for both ad and organic clicksSeveral million dollars of ad spend

Bid that the advertiser placed for each ad click 15Slide16

Advertising for own brand name

Advertise for brand name NAB is computed over search impressions where user searches for brand name and ad is shown Do not advertise for brand nameNAB is computed over search impressions where user searches for brand name and ad is NOT shown

16Slide17

Advertising for own brand name

Conversions

Total number of conversions through ads and organic results

Number of conversions through organic results

Yes

, advertise

No, do not advertise

Users search for brand and advertiser ad is shown

Users search for brand and advertiser ad is not shown

Impressions

Cost

Cost of campaign

0

Target cost

 

--- but irrelevant

 

17Slide18

Advertising on own brand name

 

 

18Slide19

Incremental benefit is limited

 

32% advertisers net loss

19

Why do advertisers advertise for their brand name?Slide20

Click-through-rate is misleading

Click-through-rate not correlated to campaign performance 20

 

CTRSlide21

Summary

We introduce NAB which can be used measure profitability of an ad campaign without access to profit information from advertisersAdvertisers often target the wrong users Common strategy of targeting own brand name can be a net loss Commonly used metrics can be misleading

21Slide22

Thank you

22Slide23

Measuring campaign performance

Value of conversion for advertiser is unknownAdvertiser diversitySix orders of magnitude difference on total ad spendAd strategy comparison has to be advertiser centricQuery level analysis leads to poor statistical significance

When comparing ad strategies we should aggregate similar queries