Abstract
As search engines are leading revenue growth in online marketing, search marketing has become a popular area of academic research. Although search engine advertising has interested researchers for decades and much has been learned, one thing that puzzles scholars is why search engine optimization companies are not excluded from the market but rather tolerated as they capture a significant share of the advertising market. In this paper, we shed light on this phenomenon and establish an analytical model based on organic search quality. Through the analysis of the model, several intriguing conclusions have been drawn. Firstly, there is no strictly positive correlation between advertisers’ willingness-to-pay and the click price of paid search marketing. In other words, the click price may decrease as advertisers’ willingness-to-pay increases. Secondly, improving the effectiveness of a search engine (SE) has the potential to attract more searchers, but it may also result in a decline in the SE’s profits. Finally, a SE may achieve higher profits with SEO firms in the market rather than driving them out. We discuss our contribution to search engine marketing and provide implications for SEs, SEO firms, and advertisers.
DOI
10.17705/1jais.00961
Recommended Citation
Li, Kai; Shen, Chunyang; Lin, Mei; and Lin, Zhangxi, "Paid Search Marketing vs. Search Engine Optimization: Analytical Models of Search Marketing Based on Search Engine Quality" (2025). JAIS Preprints (Forthcoming). 205.
DOI: 10.17705/1jais.00961
Available at:
https://aisel.aisnet.org/jais_preprints/205