Which Clicks Lead to Conversions? - Modeling User-journeys Across Multiple Types of Online Advertising

Florian Nottorf

Abstract

With an increase in the potential to allocate financial online advertising spending, managers are facing a sophisticated decision and allocation process. We developed a binary logit model with a Bayesian mixture approach to address consumers’ buying decision processes and to account for the effects of multiple online advertising channels. By analyzing data from a medium-sized online mail order business, we found inherent differences in the effects of consumer clicks on purchasing probabilities across multiple advertising channels. We developed an alternative approach to account for the different attribution of success of advertising channels—the average success probability (ASP). Compared to standardized metrics, we found paid search advertising to be overestimated and retargeting display advertising to be underestimated. We further found that the mixture approach is useful for considering heterogeneity in the individual propensity of consumers to purchase; for the majority of consumers (more than 90%), repeated clicks on advertisements decrease their probability of purchasing. In contrast with this segment, we found a smaller segment of consumers (nearly 10%) whose clicks on advertisements increase conversion probabilities. Our approaches will help managers to better understand consumer online search and buying behavior over time and to allocate financial spending more efficiently across multiple types of online advertising.

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Paper Citation


in Harvard Style

Nottorf F. (2013). Which Clicks Lead to Conversions? - Modeling User-journeys Across Multiple Types of Online Advertising . In Proceedings of the 4th International Conference on Data Communication Networking, 10th International Conference on e-Business and 4th International Conference on Optical Communication Systems - Volume 1: ICE-B, (ICETE 2013) ISBN 978-989-8565-72-3, pages 141-152. DOI: 10.5220/0004504901410152


in Bibtex Style

@conference{ice-b13,
author={Florian Nottorf},
title={Which Clicks Lead to Conversions? - Modeling User-journeys Across Multiple Types of Online Advertising},
booktitle={Proceedings of the 4th International Conference on Data Communication Networking, 10th International Conference on e-Business and 4th International Conference on Optical Communication Systems - Volume 1: ICE-B, (ICETE 2013)},
year={2013},
pages={141-152},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0004504901410152},
isbn={978-989-8565-72-3},
}


in EndNote Style

TY - CONF
JO - Proceedings of the 4th International Conference on Data Communication Networking, 10th International Conference on e-Business and 4th International Conference on Optical Communication Systems - Volume 1: ICE-B, (ICETE 2013)
TI - Which Clicks Lead to Conversions? - Modeling User-journeys Across Multiple Types of Online Advertising
SN - 978-989-8565-72-3
AU - Nottorf F.
PY - 2013
SP - 141
EP - 152
DO - 10.5220/0004504901410152