University of Pennsylvania ScholarlyCommons Operations, Information and Decisions Papers Wharton Faculty Research 7-2010 Analyzing the Relationship Between Organic and Sponsored Search Advertising: Positive, Negative, or Zero Interdependence? Sha Yang Anindya Ghose University of Pennsylvania Follow this and additional works at: https://repository.upenn.edu/oid_papers Part of the E-Commerce Commons, Marketing Commons, Operations and Supply Chain Management Commons, and the Other Business Commons Recommended Citation Yang, S., & Ghose, A. (2010). Analyzing the Relationship Between Organic and Sponsored Search Advertising: Positive, Negative, or Zero Interdependence?. Marketing Science, 29 (4), 602-623. http://dx.doi.org/10.1287/mksc.1090.0552 This paper is posted at ScholarlyCommons. https://repository.upenn.edu/oid_papers/101 For more information, please contact
[email protected]. Analyzing the Relationship Between Organic and Sponsored Search Advertising: Positive, Negative, or Zero Interdependence? Abstract The phenomenon of paid search advertising has now become the most predominant form of online advertising in the marketing world. However, we have little understanding of the impact of search engine advertising on consumers' responses in the presence of organic listings of the same firms. In this paper, we model and estimate the interrelationship between organic search listings and paid search advertisements. We use a unique panel data set based on aggregate consumer response to several hundred keywords over a three-month period collected from a major nationwide retailer store chain that advertises on Google. In particular, we focus on understanding whether the presence of organic listings on a search engine is associated with a positive, a negative, or no effect on the click-through rates of paid search advertisements, and vice versa for a given firm.