Online marketplaces are increasingly adopting innovative business models such as using paid advertising as a major revenue source. We explore the two popular advertising tools, sponsored search and social media endorsement, in attracting web traffic from online sellers’ perspective. We estimate an endogenous treatment model with latent variable to model online traffic given sellers’ decisions on employing different advertising strategies. We find evidence that both sponsored search and social media endorsement are significant in attracting traffic, after we control for seller self-selection behavior in choosing their strategies. Sponsored search has a higher impact on low-reputation sellers in bringing more traffic, and sellers with more return customers have higher benefit in using sponsored search in generating traffic. The findings are consistent with informative view of the advertising theory, and they provide interesting and import implications for both the platform and market participants.

中文翻译：

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在线市场中卖方广告策略的实证分析

在线市场越来越多地采用创新的商业模式，例如使用付费广告作为主要收入来源。我们从在线卖家的角度探讨了两种流行的广告工具，即赞助搜索和社交媒体认可，以吸引网络流量。考虑到卖家对采用不同广告策略的决策，我们估计了一个具有潜在变量的内生处理模型，以对在线流量进行建模。在我们控制卖方选择策略的自我选择行为之后，我们发现有证据表明，赞助搜索和社交媒体认可均对吸引流量具有重要作用。赞助搜索对低信誉的卖家带来更多流量的影响更大，而回头客较多的卖家在使用赞助搜索产生流量方面具有更高的收益。