Chang Hee Park, Binghamton: You might be
paying too much for ads on Google, Bing
February 7, 2018
you dish out money to bid for a top-ranked
ad position on a search engine, you may want
to pause and make sure it's actually going
to pay off.
New research out of Binghamton University,
State University of New York suggests that
instead of just spending to get that top
spot, advertisers should be considering
other factors as well to ensure they are
getting the best results from their
sponsored search advertising campaigns.
Sponsored search advertising involves paying
search engines, like Google and Bing, to bid
for placements on the search results pages
for specific keywords and terms. The ads
appear in sponsored sections, separate from
the organic search results, on those pages.
"The common belief in sponsored search
advertising is that you should buy the top
ad position to get more clicks, because that
will lead to more sales," said Binghamton
University Assistant Professor of Marketing
Chang Hee Park. "But the fee for the top
position could be larger than the expected
sales you'd get off that top position."
Park, with the help of Binghamton University
Professor of Marketing Manoj Agarwal,
analyzed data collected from a search engine
and created a model that can forecast the
number of clicks advertisers could expect in
sponsored search markets based on four
• Rank in the sponsored listings
• Website quality
• Brand equity
• Selling proposition
The model gives advertisers a way to
quantify the expected clicks they'd get by
adjusting these four factors, while also
taking into consideration how their
competitors are managing these four factors.
This could enable advertisers to find a
perfect blend of the four factors to ensure
they are getting the most out of what they
are paying for their ad positions.
It may also indicate that they should be
spending more money to bolster their brand
or website rather than amplifying their
offers in top ad positions.
"Using this model, you may find that paying
less for a lower ad position while investing
more in improving your website is more
effective than spending all of that money
strictly on securing top ad positions," said
This applies especially if your competitor
has a poorer-quality website, but is
spending more than you on securing top ad
Their model found that poor-quality
advertisers that are ranked higher in ad
positions drive consumers back to the search
results page, leading consumers to then
click on advertisers in lower ad positions
to find what they are looking for.
In contrast, they also found that a
highly-ranked good-quality advertiser
results in significantly less clicks for all
the advertisers ranked below them.
"It's more likely that in the top position,
all advertisers being equal, you'll get more
clicks. But depending on these four factors,
as well as the quality of your competitors,
you may find that you'll get more clicks in
the second or the third position," said
this is not a new idea, but now the model
can help determine this by accounting for
multiple factors at play at the same time."
Advertisers aren't the only ones who can
benefit from this research.
Park and Agarwal's model found that simply
reordering the listed advertisers could
result in significant changes in overall
click volume (the total number of clicks
across all advertisers) for search engines.
"Because they often charge on a
pay-per-click model, search engines can now
simulate which ordering of advertisers in a
sponsored search market results in the most
overall clicks and, therefore, most revenue"
said Park. "Search engines may want to
consider charging advertisers in a way that
gives the search engine more flexibility in
determining the order in which the ads in
sponsored sections are displayed."