Download or read book Incentive Problems in Performance Based Online Advertising written by Yu Jeffrey Hu and published by . This book was released on 2017 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: The multibillion-dollar online advertising industry continues to debate whether to use the CPC (cost per click) or CPA (cost per action) pricing model as an industry standard. This article applies the economic framework of incentive contracts to study how these pricing models can lead to risk sharing between the publisher and the advertiser and incentivize them to make efforts that improve the performance of online ads. We find that, compared to the CPC model, the CPA model can better incentivize the publisher to make efforts that can improve the purchase rate. However, the CPA model can cause an adverse selection problem: the winning advertiser tends to have a lower profit margin under the CPA model than under the CPC model. We identify the conditions under which the CPA model leads to higher publisher (or advertiser) payoffs than the CPC model. Whether publishers (or advertisers) prefer the CPA model over the CPC model depends on the advertisers' risk aversion, uncertainty in the product market, and the presence of advertisers with low immediate sales ratios. Our findings indicate a conflict of interest between publishers and advertisers in their preferences for these two pricing models. We further consider which pricing model offers greater social welfare.
Download or read book Performance Based Pricing Models in Online Advertising written by Yu Jeffrey Hu and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Internet is a much more accountable and measurable medium than traditional media. The unique property of the Internet being a medium with bidirectional information flows has enabled performance-based pricing models that tie online advertising payments directly to campaign measurement data such as click-throughs and purchases. These pricing models have become increasingly popular in the online advertising industry. This paper provides explanations as to when and how incorporating performance-based pricing models into advertising deals can be profitable. We argue that the publisher can make non-contractible efforts that may improve the effectiveness of advertising campaigns. These efforts are costly to the publisher. Therefore, performance-based pricing models can be used to give the publisher proper incentives to make its efforts. We derive an optimal contract that maximizes the sum of the advertiser's utility and the publisher's utility, and show that key factors that influence the use of performance-based pricing models are the importance of the publisher's incremental efforts, precision of click-through measurement, and uncertainty in the product market. We also clarify issues that are being debated in the industry, such as how the importance of the advertiser's incremental efforts and existence of non-immediate purchases affect the use of performance-based pricing models.
Download or read book Essays on Incentives and Measurement of Online Marketing Efforts written by Ron Berman and published by . This book was released on 2014 with total page 100 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation contains three essays that examine different aspects of online marketing activities, the ability of marketers to measure the effectiveness of such activities, and the design of experiments to aid in this measurement. Chapter 2 examines the impact of search engine optimization (SEO) on the competition between advertisers for organic and sponsored search results. The results show that a positive level of search engine optimization may improve the search engine's ranking quality and thus the satisfaction of its visitors. In the absence of sponsored links, the organic ranking is improved by SEO if and only if the quality provided by a website is sufficiently positively correlated with its valuation for consumers. In the presence of sponsored links, the results are accentuated and hold regardless of the correlation. Chapter 3 examines the attribution problem faced by advertisers utilizing multiple advertising channels. In these campaigns advertisers predominantly compensate publishers based on effort (CPM) or performance (CPA) and a process known as Last-Touch attribution. Using an analytical model of an online campaign we show that CPA schemes cause moral-hazard while existence of a baseline conversion rate by consumers may create adverse selection. The analysis identifies two strategies publishers may use in equilibrium - free-riding on other publishers and exploitation of the baseline conversion rate of consumers. Our results show that when no attribution is being used CPM compensation is more beneficial to the advertiser than CPA payment as a result of free-riding on other's efforts. When an attribution process is added to the campaign, it creates a contest between the publishers and as a result has potential to improve the advertiser's profits when no baseline exists. Specifically, we show that last-touch attribution can be beneficial for CPA campaigns when the process is not too accurate or when advertising exhibits concavity in its effects on consumers. As the process breaks down for lower noise, however, we develop an attribution method based on the Shapley value that can be beneficial under flexible campaign specifications. To resolve adverse selection created by the baseline we propose that the advertiser will require publishers to run an experiment as proof of effectiveness. Chapter 4 discusses the type of experiments an advertiser can run online and their required sample sizes. We identify several shortcomings of the current prevailing experimental design that may result in longer experiments due to overestimation of the required sample sizes. We discuss the use of sequential analysis in online experiments and the different goals of the experiments to make experiments more efficient. Using these techniques we show that a significant lowering of required sample sizes is achievable online.
Download or read book Performance Based Pricing written by Juan Feng and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Performance-based advertising is becoming increasingly popular in the online advertising industry, where advertisers pay the publisher only when an “action” (e.g., a click-through or a purchase) is generated by the advertisement. This paper illustrates that adopting this emerging advertising scheme has profound impacts on one of the fundamental functions of advertising - signaling product quality. We identify several important dimensions that affect the signaling function of performance-based advertising relative to its traditional counterpart (impression-based advertising). These include: (1) Information - total advertising expenditure is determined after the demand is realized, so it is unobservable to consumers when making purchase decisions; (2) Ad performance - the measured “performance” (e.g., recorded click-throughs) includes actions generated by first-time buyers (i.e., advertising performance) and actions generated by repeat buyers (i.e., product performance), which increases the cost of signaling through advertising; (3) Demand uncertainty - the merchant pays only when a response to the advertisement is generated, which reduces the merchant's advertising uncertainty. We build a model of performance-based advertising by explicitly incorporating these factors and derive the conditions under which switching to performance-based advertising will (a) disable or strengthen the signaling function of advertising, (b) help or hurt the merchant, and (c) lead to a shared interest (win-win or lose-lose) or a conflicting interest (win-lose) for the the publisher and the merchant.
Download or read book Information Asymmetry in Online Advertising written by Jan W. Wiktor and published by Routledge Studies in Marketing. This book was released on 2023-05-31 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Advertising is a company's major form of communication with the market; it is a component of the IMC system, having a special impact on the addressee, and is a form of persuasive communication affecting consumer behaviour. Advertising may reflect information asymmetry between an advertiser and recipients. This book presents an assessment of the forms and range of consumer behaviour manipulation through information asymmetry in online advertising and explores the possible causes, forms, and effects. The work offers a new approach to the role of advertising in the digital world, especially its forms and impact strategies. The theoretical framework presented is based on issues related to online advertising, information asymmetry, and social manipulation. The book describes the ways in which these areas can be explored, and it presents the results of empirical studies. Empirical research allows for identifying companies' moral hazard strategies and their consequences - e-consumers' adverse selection. The research provides an empirical answer to the question: to what extent is advertising a transparent form of communication, and to what extent does it represent the world of manipulation? Based on an interdisciplinary theoretical approach, empirical studies conducted by the authors, and theoretical and managerial implication, the book encourages its readers to find their own answers. Given the interdisciplinary nature of this work, it will be of interest to scholars and researchers within the fields of marketing, media and communication, economics, psychology, sociology, and ethics.
Download or read book The Impact of Performance Based Advertising on the Prices of Advertised Goods written by Chrysanthos Dellarocas and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: An important current trend in advertising is the replacement of traditional pay-per-exposure (aka pay-per-impression) pricing models with performance based mechanisms in which advertisers pay only for measurable actions by consumers. Such pay-per-action mechanisms are becoming the predominant method of selling advertising on the Internet. Well-known examples include pay-per-click, pay-per-call and pay-per-sale. This work highlights an important, and hitherto unrecognized, side-effect of pay-per-action advertising. I find that, if the prices of advertised goods are endogenously determined by advertisers to maximize profits net of advertising expenses, pay-per-action mechanisms induce firms to distort the prices of their goods (usually upwards) relative to the prices that would maximize profits in settings where advertising is sold under pay-per-exposure methods. Upward price distortions reduce consumer surplus and one or both of advertiser profits and publisher revenues, leading to a net reduction in social welfare. They persist in current quality-weighted pay-per-action schemes, such as the ones used by Google and Yahoo. In the latter settings they always reduce publisher revenues relative to pay-per-exposure methods. I propose enhancements to today's quality-weighted pay-per-action schemes that resolve these problems and show that the steady state limit of my enhanced mechanisms has identical allocation and revenue properties to those of an optimal pay-per-exposure mechanism.
Download or read book Online and Matching Based Market Design written by Federico Echenique and published by Cambridge University Press. This book was released on 2023-04-30 with total page 722 pages. Available in PDF, EPUB and Kindle. Book excerpt: The rich, multi-faceted and multi-disciplinary field of matching-based market design is an active and important one due to its highly successful applications with economic and sociological impact. Its home is economics, but with intimate connections to algorithm design and operations research. With chapters contributed by over fifty top researchers from all three disciplines, this volume is unique in its breadth and depth, while still being a cohesive and unified picture of the field, suitable for the uninitiated as well as the expert. It explains the dominant ideas from computer science and economics underlying the most important results on market design and introduces the main algorithmic questions and combinatorial structures. Methodologies and applications from both the pre-Internet and post-Internet eras are covered in detail. Key chapters discuss the basic notions of efficiency, fairness and incentives, and the way market design seeks solutions guided by normative criteria borrowed from social choice theory.
Download or read book Issues in Information Science Information Technology Systems and Security 2013 Edition written by and published by ScholarlyEditions. This book was released on 2013-05-01 with total page 647 pages. Available in PDF, EPUB and Kindle. Book excerpt: Issues in Information Science—Information Technology, Systems, and Security: 2013 Edition is a ScholarlyEditions™ book that delivers timely, authoritative, and comprehensive information about Computer Security. The editors have built Issues in Information Science—Information Technology, Systems, and Security: 2013 Edition on the vast information databases of ScholarlyNews.™ You can expect the information about Computer Security in this book to be deeper than what you can access anywhere else, as well as consistently reliable, authoritative, informed, and relevant. The content of Issues in Information Science—Information Technology, Systems, and Security: 2013 Edition has been produced by the world’s leading scientists, engineers, analysts, research institutions, and companies. All of the content is from peer-reviewed sources, and all of it is written, assembled, and edited by the editors at ScholarlyEditions™ and available exclusively from us. You now have a source you can cite with authority, confidence, and credibility. More information is available at http://www.ScholarlyEditions.com/.
Download or read book Impacts of Online Advertising on Business Performance written by Tereza Semerádová and published by Business Science Reference. This book was released on 2019-12 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: "This book examines online advertising activities and their connection to business performance in online environments. It also explores online communication channels including website presentation, social media, advertising platforms, and e-mailing"--
Download or read book Essays on Online Advertising Issues written by Min Chen and published by . This book was released on 2011 with total page 290 pages. Available in PDF, EPUB and Kindle. Book excerpt: The third essay analyzes click fraud in a setting wherein a neutral third party investigates the disagreements between the SP and the advertiser. I consider two investigation payment schemes, the SP-pay scheme (SS) and the advertiser-pay scheme (AS) and find the following results: first, the two parties can never be both better off in SS. Second, the advertiser may also benefit from the SP's choice of AS if the investigation cost is moderate and the SP's incentive problem is more severe in the AS. Third, when the advertiser's incentive problem is more severe in both schemes, although the sum of the SP's and advertiser's profits are higher in AS, the SP always prefers SS because he can increase his profits by "hurting" the advertiser more in the SS.
Download or read book Algorithmic Game Theory written by Noam Nisan and published by Cambridge University Press. This book was released on 2007-09-24 with total page 928 pages. Available in PDF, EPUB and Kindle. Book excerpt: In recent years game theory has had a substantial impact on computer science, especially on Internet- and e-commerce-related issues. Algorithmic Game Theory, first published in 2007, develops the central ideas and results of this exciting area in a clear and succinct manner. More than 40 of the top researchers in this field have written chapters that go from the foundations to the state of the art. Basic chapters on algorithmic methods for equilibria, mechanism design and combinatorial auctions are followed by chapters on important game theory applications such as incentives and pricing, cost sharing, information markets and cryptography and security. This definitive work will set the tone of research for the next few years and beyond. Students, researchers, and practitioners alike need to learn more about these fascinating theoretical developments and their widespread practical application.
Download or read book Impacts of Online Advertising on Business Performance written by and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Creating a brand ́s image to ultimately sell promoted products has made digital advertising a key instrument for reaching marketing and business goals for many companies. In order to expand fan bases, promote company culture, and engage in communication with current customers, business professionals have made monitoring the impact of their advertisements a fundamental priority. Impacts of Online Advertising on Business Performance is a collection of innovative research that merges the theoretical background presented in the scientific research with the practical experience and real-life data originating from real advertising campaigns and website traffic. While highlighting topics including data analytics, digital advertising, and consumer behavior, this book is ideally designed for managers, marketers, advertisers, business administrations, researchers, industry professionals, investors, academicians, and students concerned with the management of online marketing activities.
Download or read book Quantitative Problem Solving Methods in the Airline Industry written by Cynthia Barnhart and published by Springer Science & Business Media. This book was released on 2011-12-22 with total page 461 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book reviews Operations Research theory, applications and practice in seven major areas of airline planning and operations. In each area, a team of academic and industry experts provides an overview of the business and technical landscape, a view of current best practices, a summary of open research questions and suggestions for relevant future research. There are several common themes in current airline Operations Research efforts. First is a growing focus on the customer in terms of: 1) what they want; 2) what they are willing to pay for services; and 3) how they are impacted by planning, marketing and operational decisions. Second, as algorithms improve and computing power increases, the scope of modeling applications expands, often re-integrating processes that had been broken into smaller parts in order to solve them in the past. Finally, there is a growing awareness of the uncertainty in many airline planning and operational processes and decisions. Airlines now recognize the need to develop ‘robust’ solutions that effectively cover many possible outcomes, not just the best case, “blue sky” scenario. Individual chapters cover: Customer Modeling methodologies, including current and emerging applications. Airline Planning and Schedule Development, with a look at many remaining open research questions. Revenue Management, including a view of current business and technical landscapes, as well as suggested areas for future research. Airline Distribution -- a comprehensive overview of this newly emerging area. Crew Management Information Systems, including a review of recent algorithmic advances, as well as the development of information systems that facilitate the integration of crew management modeling with airline planning and operations. Airline Operations, with consideration of recent advances and successes in solving the airline operations problem. Air Traffic Flow Management, including the modeling environment and opportunities for both Air Traffic Flow Management and the airlines.
Download or read book The Complete Guide to Sales Force Incentive Compensation written by Andris Zoltners and published by AMACOM. This book was released on 2006-08-07 with total page 511 pages. Available in PDF, EPUB and Kindle. Book excerpt: A well-designed and implemented incentive program is an essential tool for building a motivated, highly effective sales force that delivers the results you need. Incentive programs are seductively powerful but complicated instruments. Without careful planning and implementation, they can be too stingy to motivate, too complex to understand, too quick to reward mediocre results, and too difficult to implement. The Complete Guide to Sales Force Incentive Compensation is a practical, accessible, detailed roadmap to building a compensation system that gets it right by creating motivating incentives that produce positive outcomes. Packed with hundreds of real-life examples of what works and what doesn't, this important guide helps you: Understand the value of building an incentive plan that is aligned with your company's goals and culture. Avoid the common trap of overusing incentives to solve too many sales management problems. Measure the effectiveness of your current incentive program, employing easy-to-use tools and metrics for pinpointing its weak spots. Design a compensation plan that attracts and retains successful salespeople, including guidelines for determining the correct pay level, the best salary incentive mix, the proper performance measures, and the right performance payout relationship. Select an incentive compensation plan that works for your organization -- then test the plan before it is launched. Set territory-level goals that are fair and realistic, and avoid overpaying the sales force or demoralizing salespeople by having difficult goals or not fairly assigned. Create and manage sales contests, SPIFFs (Special Performance Incentive for Field Force), and recognition programs that consistently deliver the intended results. Manage a successful transition to a new compensation plan and build efficient administration systems to support your plan. Filled with ready-to-use formulas and assessment tools and a wealth of insights from frontline sales managers and executives, The Complete Guide to Sales Force Incentive Compensation is your hands-on, easy-to-read playbook for crucially important decisions.
Download or read book Cases on Strategic Information Systems written by Khosrow-Pour, D.B.A., Mehdi and published by IGI Global. This book was released on 2006-04-30 with total page 379 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This book provides practitioners, educators, and students with examples of the successes and failures in the implementation of strategic information systems in organizations"--Provided by publisher.
Download or read book Double Marginalization in Performance Based Advertising written by Chrysanthos Dellarocas and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: An important current trend in advertising is the replacement of traditional pay-per-exposure (pay-per-impression) pricing models with performance-based mechanisms in which advertisers pay only for measurable actions by consumers. Such pay-per-action (PPA) mechanisms are becoming the predominant method of selling advertising on the Internet. Well-known examples include pay-per-click, pay-per-call and pay-per-sale. This work highlights an important, and hitherto unrecognized, side-effect of PPA advertising. I find that, if the prices of advertised goods are endogenously determined by advertisers to maximize profits net of advertising expenses, PPA mechanisms induce firms to distort the prices of their goods (usually upwards) relative to prices that would maximize profits in settings where advertising is sold under pay-per-exposure methods. Upward price distortions reduce both consumer surplus and the joint publisher-advertiser profit, leading to a net reduction in social welfare. They persist in current auction-based PPA mechanisms, such as the ones used by Google and Yahoo. In the latter settings they always reduce publisher revenues relative to pay-per-exposure methods. In extreme cases they also lead to rat-race situations where, in their effort to outbid one another, advertisers raise the prices of their products to the point where demand for them drops to zero. I show that these phenomena constitute a form of double marginalization and discuss a number of enhancements to today's PPA mechanisms that restore equilibrium pricing of advertised goods to efficient levels.
Download or read book Strategic Affiliate Marketing written by Simon Goldschmidt and published by Edward Elgar Publishing. This book was released on 2003-01-01 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt: Rather than arguing the rights and wrongs in absolute terms, this book presents a strategy for engaging in affiliate marketing. The authors also examine what considerations should be taken into account before doing so, as well as investigating how to optimise resources once fully active in this area.".
