From keyword signals to interactive success: how advertising information shapes consumer behavior in sponsored search advertising

Purpose - Exploring factors beyond position rank that determine the sponsored search advertising performance is critical, which reduces sellers' reliance on costly bidding price. In this study, we focus on keyword specificity and keyword popularity, and examine how they influence the click-through rate (CTR) and conversion rate (CR) of search advertising differently. We also examine how two types of advertising information (commercial and quality) vary the effects of each keyword attribute.
Design/methodology/approach - Using a dataset collected from a leading e-commerce platform in China, we employed a seemingly unrelated regression model to test the hypotheses.
Findings - Our results show that more specific keywords generate higher CR but lower CTR. On the contrary, more popular keywords generate higher CTR but lower CR. Their relative effects are influenced by advertising information. Commercial information is more conducive to improving the effects of keyword specificity, while quality information is more conducive to improving the effects of keyword popularity.
Originality/value - The current study explores the impacts of keyword specificity and keyword popularity on CTR and CR of sponsored search advertising, shifting prior research focus from single attribute to a comprehensive view of both internal and external aspects of keywords. Moreover, it enriches the literature on interactive marketing and ad copy design by introducing advertising information as sellers' response to consumer search needs and demonstrating the importance of aligning advertising information types with keyword attributes.

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