Aggregators and Contextual Effects in Search Ad Markets

Allocation and pricing of ad slots in search ad markets is typically done through a Generalized Second Price (GSP) auction, which assumes that the click-through rate (CTR) of an ad displayed in a particular position depends only on the identity of the ad and the position it is displayed in. In particular, it is assumed that there are no contextual effects, where the CTR of an ad depends on the other ads displayed with it. We argue that such effects do exist. In particular, we discuss how the economics of ad aggregation may lead to ad aggregators imposing a negative contextual effect on the CTR of advertisers listed below them. We perform an experiment where we intervene in the auction to vary the position of selected aggregators relative to other advertisers. We then measure CTR on ads controlling for ad identity and position to quantify the magnitude of the contextual effect of being listed below an aggregator. In addition we describe the result of the intervention on search engine revenue, which is consistent with an increase in advertiser social welfare.

gunawardana08__aggreg_contex_effec_searc_ad_market.pdf
PDF file

In  WWW Workshop on Targeting and Ranking for Online Advertising

Publisher  Association for Computing Machinery, Inc.
Copyright © 2007 by the Association for Computing Machinery, Inc. Permission to make digital or hard copies of part or all of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, to republish, to post on servers, or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from Publications Dept, ACM Inc., fax +1 (212) 869-0481, or permissions@acm.org. The definitive version of this paper can be found at ACM’s Digital Library –http://www.acm.org/dl/.

Details

TypeInproceedings
URLhttp://www.acm.org/
> Publications > Aggregators and Contextual Effects in Search Ad Markets