An Empirical Analysis of Seller Advertising Strategies in an Online Marketplace

Haoyan Sun, Ming Fan, Yong TanInformation SystemsIT治理UTD24

Information Systems Research2020-03-01Lehigh University; University of WashingtonDOI

Citations82

Online marketplaces, such as Taobao, Amazon, and eBay, are increasingly adopting innovative business models such as paid advertising as an important revenue source. We study the effectiveness of two popular advertising tools, sponsored search and social media endorsement, in increasing online traffic and sales for online sellers at a retail e-commerce platform. We find that both sponsored search and social media endorsement can significantly increase traffic for sellers, with sponsored search being more effective than social media endorsement. However, only sponsored research has a positive and significant impact on sales. The two strategies also have differential effect on sellers with low and high reputations. Our findings are of great importance, as they provide additional insights into how these advertising tools can work more effectively in increasing traffic and sales for sellers with different reputation levels, thus providing important implications to guide the strategic choices for sellers as well as the platform.

ReputationSocial mediaRevenueAdvertisingBusinessOnline advertisingOnline businessMarketingThe InternetComputer scienceWorld Wide WebAuction Theory and Applications