W study the bidding strategies of vertically differentiated firms that bid for sponsored search advertisement positions for a keyword at a search engine. We explicitly model how consumers navigate and click on sponsored links based on their knowledge and beliefs about firm qualities. Our model yields several interesting insights; a main counterintuitive result we focus on is the “position parad...

We study keyword auctions in a model where each advertiser has a value for every slot, which is not necessarily proportional to the number of clicks the advertiser expects to receive in that slot. In our model, advertisers need not only derive values from clicks on their ad, nor do they need to value clicks in all slots equally. This model encompasses a variety of advertising objectives, includ...

A Dynamic Model of Sponsored Search Advertising Sponsored search advertising is ascendant— Jupiter Research reports expenditures rose 28% in 2007 to $8.9B and will continue to rise at a 26% CAGR, approaching 1/2 the level of television advertising and making it one of the major advertising trends to a¤ect the marketing landscape. Yet little empirical research exists to explore how the interacti...

The generalized second price (GSP) auction has served as the core selling mechanism for sponsored search ads for over a decade. However, recent trends expanding the set of allowed ad formats—to include a variety of sizes, decorations, and other distinguishing features—have raised critical problems for GSP-based platforms. Alternatives such as the Vickrey-Clarke-Groves (VCG) auction raise di↵ere...

This paper provides a comprehensive study of the structure and dynamics of online advertising markets, mostly based on techniques from the emergent discipline of complex systems analysis. First, we look at how the display rank of a URL link influences its click frequency, for both sponsored search and organic search. Second, we study the market structure that emerges from these queries, especia...

A mediator is a well-known construct in game theory, and is an entity that plays on behalf of some of the agents who choose to use its services, while the rest of the agents participate in the game directly. We initiate a game theoretic study of sponsored search auctions, such as those used by Google and Yahoo!, involving incentive driven mediators. We refer to such mediators as for-profit medi...

In this research, we analyze the relationship among (1) the performance metrics of key phrases used in a sponsored search campaign, (2) the gender orientation of those key phrases, and (3) the occurrence of branded terms in those search queries. The aim of this research is increased personalization of search engine results in order to improve the consumer’s online searching experience and poten...

My Ph.D. thesis focuses on the design of economic mechanisms inspired by sponsored search auctions to support new generation search engines. These engines (called integrators) are based on multi-domain queries and on the federation of multiple domain-specific search engines. The problem studied in my thesis is essentially a mechanism design problem where two levels are present: in the first, th...

Search engines are commercial entities that require revenue to survive. The most prevalent revenue stream for search engines is sponsored search, where content providers have search engines service their links to users in response to queries or in a contextual manner on relevant Web sites. In exchange for providing this service, content providers pay search engines based on the number of clicks...

The standard business model in the sponsored search marketplace is to sell click-throughs to the advertisers. This involves running an auction that allocates advertisement opportunities based on the value the advertiser is willing to pay per click, times the click-through rate of the advertiser. The click-through rate of an advertiser is the probability that if their ad is shown, it would be cl...