Converting browsers into recurring customers: an analysis of the determinants of sponsored search success for monthly subscription services Alan S. Abrahams • Reza Barkhi • Eloise Coupey • Cliff T. Ragsdale • Linda G. Wallace Ó Springer Science+Business Media New York 2014 Abstract Sponsored search is a multi-billion dollar market. Determining which characteristics of sponsored search campaigns are associated with campaign success has been an active research field, particularly in the con- sumer retail industry. We develop and examine a theoret- ical model that integrates and extends established theories of information content, persuasive content, emotion, and style of advertising in traditional media (print, television) to online advertising. We analyze the determinants of sponsored search success across multiple sub-industries in the long term subscription market, with data on four companies who sell long term subscription services with monthly recurring revenue. We use structured equation modeling to test a model that relates bid content features to the average position and number times an ad is displayed (i.e., impressions) in search engine results. In turn, the average position and number of impressions, together with the ad content features, influence the number of times that consumers will click on an ad. The results, based on the magnitude of path coefficients for all companies (i.e., brands), show that average position and total impressions (which are influenced by bid characteristics) have a far stronger effect on clicks than the impact of ad character- istics. The content analysis study undertaken here vividly illustrates that the effects of information content, persua- sive content, emotion, and style on advertisement clicks are highly diverse across brands. This suggests the need for future research on brand, product, and consumer-specific factors that influence clicks, and further research on auto- mated tools that provide tailored content optimization guidance to online campaign managers. Keywords Search engine advertising  Content analysis 1 Introduction In the first half of 2013, online advertising expenditures exceeded $20 billion—sponsored search accounted for 43 % of this online advertising spending [42]. The spon- sored search process is as follows. Internet users input search terms into popular search engines like Google. Advertisers bid on keywords that are relevant to these search terms: the higher the relevance between the internet user’s search term and the advertiser’s bid keyword (‘‘bid’’), and the higher the bid amount offered by the advertiser for the listing, the more likely the advertisement text (‘‘ad’’) will be displayed in the ‘‘Sponsored Results’’ area of the search results listing [18, 20, 31]. The three predominant pricing schemes historically used by search engines are pay-per-impression (PPM), pay-per- A. S. Abrahams (&)  C. T. Ragsdale Department of Business Information Technology, Pamplin College of Business, Virginia Tech, 1007 Pamplin Hall, Blacksburg, VA 24061, USA e-mail: abra@vt.edu C. T. Ragsdale e-mail: crags@vt.edu R. Barkhi  L. G. Wallace Department of Accounting and Information Systems, Pamplin College of Business, Virginia Tech, 3007 Pamplin Hall, Blacksburg, VA 24061, USA e-mail: reza@vt.edu L. G. Wallace e-mail: wallacel@vt.edu E. Coupey Department of Marketing, Pamplin College of Business, Virginia Tech, 2016 Pamplin Hall, Blacksburg, VA 24061, USA e-mail: ecoupey@vt.edu 123 Inf Technol Manag DOI 10.1007/s10799-014-0186-0