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An Exploratory Analysis of Determinants and Effectiveness of Advertising on eBay
The BRC Journal of Advances in Business (2010)
  • Mikhail I. Melnik, Kennesaw State University
  • Paul Richardson
This study was an exploratory analysis of determinants and effectiveness of advertising on eBay. This study employed principles of signaling theory to examine and test the selection and impact of advertising tools on eBay. Consistent with this theory, we predicted that advertising vehicles high in informational value would be used more extensively by sellers. We also predicted investments in informational advertising would be especially preferred by sellers who enjoy high seller ratings because such sellers can make more credible statements. Informational advertising was also expected to increase with the level of price variation and competitive intensity in the market. We also predicted advertising intensity would depend on the cost of the advertising and the extent to which such costs can be allocated across items in multiple listings. Finally, we hypothesized auction outcome would be driven primarily by prices and shipping costs, rather than by advertising vehicles. The hypotheses were tested using an extensive dataset of real auction data for a new electronic GPS device. Empirical tests showed good support for the hypotheses overall. An important contribution of this paper is that it is the largest exploratory analysis of advertising on eBay ever conducted. In this text, implications for advertising on eBay are discussed.
Publication Date
February, 2010
Citation Information
Mikhail I. Melnik and Paul Richardson. "An Exploratory Analysis of Determinants and Effectiveness of Advertising on eBay" The BRC Journal of Advances in Business Vol. 1 Iss. 1 (2010)
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