Authors: Vincent Bremer; Burkhardt Funk
Addresses: Scharnhorststr. 1, Leuphana University, Lueneburg, 21335, NI, Germany ' Scharnhorststr. 1, Leuphana University, Lueneburg, 21335, NI, Germany
Abstract: Investments in both paid and organic search are crucial for today's online retailer. In this paper, we analyse how consumers respond to organic and paid search advertising and gain insight into the interrelationship between these online marketing channels. We use a binary logit model and Markov-Chain-Monte-Carlo techniques and analyse the interaction effects between paid and organic search and the conversion probability based on clickstream data from a major electronic retailer. Our findings indicate that there is a positive relationship: when consumers interact with both paid and organic search, a strong positive effect occurs towards the conversion probability in the short-term compared to when users only interact with one channel. Our findings are valuable for organizations in regards to their online marketing strategies and budgeting.
Keywords: paid search advertising; organic search; hierarchical Bayesian models; search engines; SEA; search engine advertising; SEO; search engine optimisation; clickstream analysis; online marketing; online retailing; e-tailing; e-marketing; electronic marketing; binary logit model; Markov chain Monte Carlo; MCMC; marketing channels.
International Journal of Electronic Business, 2017 Vol.13 No.2/3, pp.205 - 215
Accepted: 20 Nov 2016
Published online: 15 Mar 2017 *