"PROSAD: A Bidding Decision Support System for Profit Optimizing Search Engine Advertising" by Bernd Skiera, Goethe University, Nadia Abou Nabout, Goethe University and Steffen Vogel, SEA.
The authors present a model-based decision support system to enable optimal bidding for key words as well as facilitating human intervention in the process of bidding for those key words. They apply the approach in a field experiment at SoQuero, a Frankfort-based online advertising agency that manages search engine optimization campaigns for more than 40 advertisers. They show that the existing system (which yields an average keyword position of 2.97 versus 3.79 for the DSS-purchased keywords) leads to significant overpayment for the keywords, with profits after acquisition costs of -0.13 euro per keyword for the existing system versus 6.24 euro per keyword with the DSS.
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