Impression Effect vs. Click-through Effect: Mechanism Design of Online Advertising

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dc.contributor.authorZou, Xiang
dc.contributor.authorWu, Ruhai
dc.contributor.authorZhong, Weijun
dc.date.accessioned2016-12-29T01:29:40Z
dc.date.available2016-12-29T01:29:40Z
dc.date.issued2017-01-04
dc.description.abstractSearch advertising and display advertising are two major online advertising formats. Search advertising emphasizes ads’ click-through effect. Advertisers only pay when users click the link of their ads. Traditional display advertising emphasizes ads’ impression effect. Most display ads are charged based on the number of views on the ads. Considering that most online ads increase brand awareness (impression effect) and directly promote sales (click-through effect), the not-emphasized effect in search advertising or display advertising actually has a significant impact on the market outcome. However, these impacts have been largely ignored. In this paper, we examine various mechanisms in search and display advertising by considering both ads’ impression effect and click-through effect. Interestingly, we show a seesaw relationship between ads’ two effects in search advertising. The advertiser whose advertisement has a strong click-through effect benefits relatively less from its impression effect. In display advertising, the real-time-bidding (RTB) mechanism considers both ads’ impression effect and click-through effect. It allows a publisher to gain more surplus than that through a static auction. However, we show that RTB is associated with a high risk of market failure.
dc.format.extent10 pages
dc.identifier.doi10.24251/HICSS.2017.474
dc.identifier.isbn978-0-9981331-0-2
dc.identifier.urihttp://hdl.handle.net/10125/41634
dc.language.isoeng
dc.relation.ispartofProceedings of the 50th Hawaii International Conference on System Sciences
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/4.0/
dc.subjectclick-through effect
dc.subjectdisplay advertising
dc.subjectimpression effect
dc.subjectmechanism
dc.subjectsearch advertising
dc.subjectreal-time bidding
dc.titleImpression Effect vs. Click-through Effect: Mechanism Design of Online Advertising
dc.typeConference Paper
dc.type.dcmiText

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