Bidding On The Buying Funnel For Sponsored Search And Keyword Advertising


Bernard J. Jansen
Simone Schuster


In this research, we evaluate the effectiveness of the buying funnel as a model for understanding consumer interaction with keyword advertising campaigns on web search engines. We analyze data of nearly 7 million records from a 33 month, $56 million (US) search engine marketing campaign of a major US retailer. We classify key phrases used in this campaign into stages of the buying funnel (i.e., Awareness, Research, Decision, and Purchase) and then compare the consumer behaviors associated with each stage of the buying funnel using the critical keyword advertising metrics of impressions, clicks, cost-per-click, sales revenue, orders, and items sold. Findings from our analysis show that the stages from the buying funnel are effective for classifying types of queries, with statistically different consumer behaviors for all attributes among all stages. However, results also indicate that the buying funnel model does not represent the actual process that consumer engage in when contemplating a potential purchase, as the stages do not seem to be associated with expected consumer actions as predicted by the model. Results show that Awareness key phrases cost less and generate more sales revenue than Purchase queries, indicating that these broader phases can be a lucrative advertising segment for sponsored search campaigns. The results reported in this paper are important to researchers interested in understanding online consumers interaction with search engines and beneficial to search engine marketers striving to design successful advertising campaigns. Insights from this research could produce keyword advertising efforts being more effectively targeted to consumers in order to achieve campaign goals.

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Published Date: 

February, 2011

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