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| Placements on the web page screen; often decided during sponsored search auctions |
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| Form of advertising typically sold at auction where merchants big for positioning alongside web search results |
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| The probability that a user will click on the ith slot when it is occupied by bidder j |
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| A technique where the system learns from a customer and recommends products that she will find more valuable from among the available products; two kinds: collaborative and content-based |
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| Compares a user to similar users and recommends items liked by similar users; uses cluster analysis to group customers |
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| Recommends new items based on their similarity to items a user is known to like; specified item attributes and finds neighbors of items preferred or chosen |
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| Advantages of collaborative-based filtering |
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Definition
1. Relatively few ratings needed
2. Can recommend dissimilar items
3. No need to describe item content |
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| Advantages of content-based filtering |
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Definition
1. Can continually introduce new items
2. Users need not rate identical items
3. Can handle sparseness, unique/distinctive users |
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| The general estimation in which a person or thing is held by the public; this collects, distributes, and aggregates information about behavior |
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| The first and largest ad server network; the consumer requests Web page from one of the network member sites, the merchant server connects to the ad server, the ad server reads cookie and checks for user profile, selects an appropriate banner, and continues to follow consumer from site to site through use of Web bugs |
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Definition
| Acts as broker between advertisers and publishers, placing ads and tracking all activity related to ad; Specifically, the content site publisher contracts out to ad server to generate ad (e.g., banner) from database |
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| Two types of online ad pricing |
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Definition
1. Impression based: advertiser pays based on how often an advertisement is displayed; paying for visibility
2. Clickthrough-based: also called performance-based, advertiser pays a small amount each time the user clicks on the ad; paying a commission for sales leads |
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| Consumer's maximum willingness to pay for a good |
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| When merchants charge different prices to different buyers in order to extract more surplus from the sale |
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| First degree price discrimination |
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Definition
| Differential prices being offered to individual consumers based on their willingness to pay for a good (e.g., individual negotiations, targeted non-transferable special deals) |
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| Second degree price discrimination |
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Definition
| Customers voluntarily choosing differential prices for different versions or quantities of a good or service (e.g., feature packages, bundles, restricted options) |
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| Third degree price discrimination |
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Definition
| Merchants assign differential prices to different consumer segments based on group characteristics or buyer features (e.g., age, student status, affiliation) |
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| Also called web bugs; graphic on a web page or in an e-mail message designed to monitor who is reading the page or message; collect information like IP address, URL, time of viewing type of browser |
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| Personally identifiable information (PII) |
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Definition
| data that can be used to identify, locate, or contact an individual; almost all e-commerce companies collect this and use cookies to track clickstream behavior |
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| Demographic and behavioral information that does not include any personal identifiers (links to public identity) but can be used to make up a virtual identity |
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| Psuedonymous information that cannot be associated with other pseudonymous information from the same individual (e.g., linking browsing history from yesterday and today from the same individual) |
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| Interstitials and Superstitials |
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| Full-page ads that pop up before destination page; the "super" contain rich media/video |
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Definition
| Arrangements among firms allowing each to have its banners displayed on other affiliate sites for no cost |
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| Elements of sponsored search |
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Definition
| Advertiser-provided content, bids for specified concepts or keywords, publisher review process, retrieving ad content based on user queries, displaying advertiser content, and gathering data, metering clicks, and charging |
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Term
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Definition
| Separate auction for each keyword, bids are tanked by bid price or bid price*CTR (CTR: estimated click through rate) |
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