Bookmarks tagged economics and online-advertising

Brand keyword advertising, the presentation informed him, was eBay’s most successful advertising method. Somebody googles "eBay" and for a fee, Google places a link to eBay at the top of the search results. Lots of people, apparently, click on this paid link. So many people, according to the consultants, that the auction website earns at least $12.28 for every dollar it spends on brand keyword advertising – a hefty profit!
Tadelis didn’t buy it. "I thought it was fantastic, and I don’t mean extraordinarily good or attractive. I mean imaginative, fanciful, remote from reality." His rationale? People really do click on the paid-link to eBay.com an awful lot. But if that link weren’t there, presumably they would click on the link just below it: the free link to eBay.com. The data consultants were basing their profit calculations on clicks they would be getting anyway.