Information Asymmetry in Online Advertising


Book Description

Advertising is a company’s major form of communication with the market; it is a component of the IMC system, having a special impact on the addressee, and is a form of persuasive communication affecting consumer behaviour. Advertising may reflect information asymmetry between an advertiser and recipients. This book presents an assessment of the forms and range of consumer behaviour manipulation through information asymmetry in online advertising and explores the possible causes, forms, and effects. The work offers a new approach to the role of advertising in the digital world, especially its forms and impact strategies. The theoretical framework presented is based on issues related to online advertising, information asymmetry, and social manipulation. The book describes the ways in which these areas can be explored, and it presents the results of empirical studies. Empirical research allows for identifying companies’ moral hazard strategies and their consequences – e-consumers’ adverse selection. The research provides an empirical answer to the question: to what extent is advertising a transparent form of communication, and to what extent does it represent the world of manipulation? Based on an interdisciplinary theoretical approach, empirical studies conducted by the authors, and theoretical and managerial implication, the book encourages its readers to find their own answers. Given the interdisciplinary nature of this work, it will be of interest to scholars and researchers within the fields of marketing, media and communication, economics, psychology, sociology, and ethics.




Information Asymmetry and Hybrid Advertising


Book Description

Pay-for-performance (P4P) pricing schemes such as pay-per-click and pay-per-action have grown in popularity in Internet advertising. Meanwhile, the traditional pay-per-impression (PPI) scheme persists, and several advertising publishers have started to offer a hybrid mix of PPI and P4P schemes. Given the proliferation of pricing scheme choices, our study examines the optimal choices for advertising publishers. We highlight two-sided information asymmetries in online advertising markets and the consequent tradeoffs faced by a high-quality publisher using P4P schemes. When there exists information asymmetry, P4P pricing schemes enable a high-quality publisher to reveal her superior quality; on the other hand, they may incur allocative inefficiencies stemming from inaccurate estimates of advertiser qualities. Our study identifies conditions under which a publisher may opt for a PPI, P4P, or a hybrid scheme and in doing so provides a theoretical explanation for the observed variations in the pricing schemes across publishers. Using a new “uncompromised” equilibrium refinement, we also demonstrate that the hybrid scheme can emerge as an equilibrium choice in a wide range of conditions. In addition to explaining the co-existence of multiple pricing schemes and the growing popularity of hybrid pricing schemes, our study also provide prescriptive guidelines for firms making choices among different pricing schemes.




Advertising on Online Marketplaces


Book Description

Advertising on e-commerce marketplaces, wherein sponsored product listings are interleaved with organic product listings, is a large and growing phenomenon. In this paper, we both theoretically and empirically study whether including sponsored listings improves or hurts the overall quality and relevance of the set of products displayed to consumers. Our theoretical analysis reveals that the relevance of the ads to the consumers' search queries depends on the level of information asymmetry between the marketplace owner and the sellers who sell products with different degrees of relevance. Specifically, when information asymmetry is low (high), i.e., the platform can (cannot) easily distinguish between high- and low-relevance sellers, then low-relevance (high-relevance) sellers have a greater incentive to advertise. However, even when low-relevance products are displayed as ads, consumers end up finding well-matching products as long as search and evaluation costs are reasonable; therefore, the overall impact on sales is relatively small while the marketplace benefits from the additional revenue from selling ads. We obtain data from a large-scale field experiment run at Flipkart, a leading online marketplace in India, and find that various empirical patterns implied by our theoretical results hold in the data. Our study provides several practical implications for managers of online marketplaces.




Disrupting Finance


Book Description

This open access Pivot demonstrates how a variety of technologies act as innovation catalysts within the banking and financial services sector. Traditional banks and financial services are under increasing competition from global IT companies such as Google, Apple, Amazon and PayPal whilst facing pressure from investors to reduce costs, increase agility and improve customer retention. Technologies such as blockchain, cloud computing, mobile technologies, big data analytics and social media therefore have perhaps more potential in this industry and area of business than any other. This book defines a fintech ecosystem for the 21st century, providing a state-of-the art review of current literature, suggesting avenues for new research and offering perspectives from business, technology and industry.




The Strategic Management of Intellectual Capital and Organizational Knowledge


Book Description

This book is the first to present a review and synthesis of the research in knowledge management and strategy management. The readings in this book will help readers get an understanding of the best methods to create and apply knowledge in order to sustain superior organizational performance.




Digital Advertising


Book Description

Digital Advertising offers a detailed and current overview of the field that draws on current research and practice by introducing key concepts, models, theories, evaluation practices, conflicts, and issues. With a balance of theory and practice, this book helps provide the tools to evaluate and understand the effects of digital advertising and promotions campaigns. New to this edition is discussion of big data analysis, privacy issues, and social media, as well as thought pieces by leading industry practitioners. This book is ideal for graduate and upper-level undergraduate students, as well as academics and practitioners.




Advertising Or Price? The Efficacy of Quality Informational Cues in Online Sponsored Search Markets


Book Description

The digitization of commerce has caused fundamental changes in consumer information search and use. With an increasing number of consumers using search engines as an integral component of their online purchase process, online sponsored search markets, such as those provided by Google and Yahoo!, have emerged as a dominant customer acquisition mechanism for sellers. Given the extent of information asymmetry in online markets, consumers rely on a number of informational cues or signals to infer the quality of sellers - advertising and price being the two most important among them. While the importance of advertising and price as signals of quality has been well established in traditional markets, online sponsored search markets have a number of unique characteristics that differentiate them from traditional settings and raise unanswered questions about the efficacy of different informational cues for consumers' search and transaction behaviors. Using a lab experiment, we examine how the knowledge of firms' relative advertising expenditures and prices affect consumers' search and purchase decisions. Contrary to earlier findings of the dominance of price signals in traditional markets, we find that firms' relative advertising expenditures serve as a stronger signal of quality in online sponsored search markets - a result attributable to the directional nature of these markets. We also find that the risk attitude of consumers has a significant impact on consumer beliefs and market outcomes. We discuss the implications of our findings for sellers and consumers using sponsored search markets, as well as for search intermediaries.




Antitrust in Data Driven Markets & Legal Framework for Influencers, Native Advertising and Control over the Use of AI in Marketing


Book Description

This book gathers contributions from a broad range of jurisdictions, written by practitioners and academics alike, and offers an unparalleled comparative view of key issues in competition law, intellectual property and unfair competition law, with a specific focus on the use of personal data. The first part focuses on the role of competition law in shaping the digital economy. It discusses the use of personal data, the market power of platforms, the assessment of free services, and more broadly the responsibility of dominant companies in the smooth functioning of the digital economy. In turn, the second part sheds light on how the conduct of influencers, native advertising and the use of AI for marketing purposes can be controlled by the law, focusing on the use of personal data and the impact of behavioral advertising on consumers. In this regard, the book brings together the current legal responses across a number of European and other countries, all summarized and elaborated on in the form of two international reports. The LIDC is a long-standing international association that focuses on the interface between competition law and intellectual property law, including unfair competition issues.




Content Marketing


Book Description

If you have a website, a blog, or even a Facebook or Twitter presence, you are a publisher. Think like one: build a digital content strategy that embraces words, images and multimedia to systematically enhance consumer engagement and conversion rates. Lieb guides you through planning what you'll say online, how and where you'll say it, how often you'll communicate, and how you'll measure your effectiveness. She offers practical guidance for "listening" to conversations about your brand, products, and services, responding more effectively, and effectively informing those conversations. You'll learn how to use your digital content strategy to shape marketing, branding, PR, SEO, customer and media relations, blog content, social media initiatives, and your website. (bron: www.managementboek.nl).




Evaluating Social Media Marketing


Book Description

This book is an innovative attempt to identify and analyse the processes related to social influence in online buying behaviour, with special attention given to the phenomenon of social proof, which is the basis of social media, recommendation marketing, and word-of-mouth (WOM) marketing. It empirically verifies the factors which influence the effectiveness of social proof, and identifies relevant impact factors. Opening with a literature review of this concept from the perspective of social psychology, sociology, and marketing, this interdisciplinary approach to the issue allows for an in-depth understanding of the mechanisms of the effective use of social proof in contemporary online marketing. Following this, in the context of theoretical considerations, the author analyses the social role and significance of social proof in the buying behaviours of online consumers. The second half of the book presents the results of the author’s quantitative and qualitative research into the effectiveness of social proof. The quantitative research verifies the hypotheses concerning the social role and significance of social proof in buying decisions and identifies the level of confidence in the opinions expressed by other web users. The qualitative research focuses on the empirical verification of the effectiveness of social proof mechanisms. Additionally, attention is given to sensitivity to social proof, i.e. the factors that increase the effectiveness of such messages, from both the sender’s and the recipient’s perspective, as well as the forms and channels of communication. Written for scholars and researchers interested in the debate on the transparency of activities carried out by companies in the area of online marketing, the book’s detailed analysis of influence utilizing both quantitative and qualitative studies may be of interest to a wider group of academics including economists, psychologists and sociologists.