Journal of the Korean Operations Research and Management Science Society (한국경영과학회지)

The Korean Operations Research and Management Science Society (한국경영과학회)
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Developing the Purchase Conversion Model of the Keyword Advertising Based on the Individual Search

개인검색기반 키워드광고 구매전환모형 개발

  • 이동일 (세종대학교 경영학과) ;
  • 김현교 (세종대학교 유통프랜차이즈 연구소)
  • Received : 2012.09.12
  • Accepted : 2012.10.19
  • Published : 2013.03.31
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Abstract

Keyword advertising has been used as a promotion tool rather than the advertising itself to online retailers. This is because the online retailer expects the direct sales increase when they deploy the keyword sponsorship. In practice, many online sellers rely on keyword advertising to promote their sales in short term with limited budget. Most of the previous researches use direct revenue factors as dependent variables such as CTR (click through rate) and CVI (conversion per impression) in their researches on the keyword advertising[14, 16, 22, 25, 31, 32]. Previous studies were, however, conducted in the context of aggregate-level due to the limitations on the data availability. These researches cannot evaluate the performance of keyword advertising in the individual level. To overcome these limitations, our research focuses on conversion of keyword advertising in individual-level. Also, we consider manageable factors as independent variables in terms of online retailers (the costs of keyword by implementation methods and meanings of keyword). In our study we developed the keyword advertising conversion model in the individual-level. With our model, we can make some theoretical findings and managerial implications. Practically, in the case of a fixed cost plan, an increase of the number of clicks is revealed as an effective way. However, higher average CPC is not significantly effective in increasing probability of purchase conversion. When this type (fixed cost plan) of implementation could not generate a lot of clicks, it cannot significantly increase the probability of purchase choice. Theoretically, we consider the promotional attributes which influence consumer purchase behavior and conduct individuals-level research based on the actual data. Limitations and future direction of the study are discussed.

Keywords

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