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How should retail advertisers manage multiple keywords in paid search advertising?

Author

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  • Kim, Alex Jiyoung
  • Jang, Sungha
  • Shin, Hyun S.
Abstract
Consumers’ online searches usually involve multiple keywords about their purchases, which vary depending on the purchase stage. Similarly, retail advertisers use a set of related keywords for competing brands. Thus, understanding how consumers search using keywords for competing brands at different purchase stages is important for retailers seeking to use multiple keywords more effectively. We examine consumers’ click behavior and retailers’ bids across multiple keywords. We empirically show that, while consumers search in a manner generally consistent with the purchase funnel, their behavior differs between market leader and follower brands. We also find that retailers consider the different keywords to be strategic complements, but this does not hold when consumers are close to making a purchase decision. Interestingly, retailers’ bid allocation across keywords may be inconsistent with consumers’ click behavior, revealing a potential opportunity to improve the performance of search advertising campaigns.

Suggested Citation

  • Kim, Alex Jiyoung & Jang, Sungha & Shin, Hyun S., 2021. "How should retail advertisers manage multiple keywords in paid search advertising?," Journal of Business Research, Elsevier, vol. 130(C), pages 539-551.
    • Handle: RePEc:eee:jbrese:v:130:y:2021:i:c:p:539-551
    DOI: 10.1016/j.jbusres.2019.09.049
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    1. Jang, Sungha & Kim, Alex Jiyoung & Yoon, Jiho, 2022. "Multiple keywords management in sponsored search advertising with interrelated consumer clicks," Journal of Business Research, Elsevier, vol. 140(C), pages 459-470.
    2. Symitsi, Efthymia & Markellos, Raphael N. & Mantrala, Murali K., 2022. "Keyword portfolio optimization in paid search advertising," European Journal of Operational Research, Elsevier, vol. 303(2), pages 767-778.

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