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A Dynamic Model Of Sponsored Search Advertising

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Executive Summary

Sponsored search advertising is ascendant-Jupiter Research reports expenditures rose 28% in 2007 to $8.9B and will continue to rise at a 15% CAGR, making it one of the major trends to affect the marketing landscape. Yet little, if any empirical research focuses upon search engine marketing strategy by integrating the behavior of various agents in sponsored search advertising (i.e., searchers, advertisers, and the search engine platform). The dynamic structural model the authors propose serves as a foundation to explore these and other sponsored search advertising phenomena.

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