The complex dynamics of sponsored search markets

Valentin Robu*, Han La Poutré, Sander Bohte

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contribution

10 Citations (Scopus)


This paper provides a comprehensive study of the structure and dynamics of online advertising markets, mostly based on techniques from the emergent discipline of complex systems analysis. First, we look at how the display rank of a URL link influences its click frequency, for both sponsored search and organic search. Second, we study the market structure that emerges from these queries, especially the market share distribution of different advertisers. We show that the sponsored search market is highly concentrated, with less than 5% of all advertisers receiving over 2/3 of the clicks in the market. Furthermore, we show that both the number of ad impressions and the number of clicks follow power law distributions of approximately the same coefficient. However, we find this result does not hold when studying the same distribution of clicks per rank position, which shows considerable variance, most likely due to the way advertisers divide their budget on different keywords. Finally, we turn our attention to how such sponsored search data could be used to provide decision support tools for bidding for combinations of keywords. We provide a method to visualize keywords of interest in graphical form, as well as a method to partition these graphs to obtain desirable subsets of search terms.

Original languageEnglish
Title of host publicationAgents and Data Mining Interaction
Subtitle of host publication4th International Workshop, ADMI 2009, Budapest, Hungary, May 10-15,2009, Revised Selected Papers
EditorsLongbing Cao, Vladimir Gorodetsky, Jiming Liu, Gerhard Weiss, Philip S Yu
Number of pages16
EditionBook Part IV
ISBN (Electronic)978-3-642-03603-3
ISBN (Print)978-3-642-03602-6
Publication statusPublished - 2009
Event4th International Workshop on Agents and Data Mining Interaction - Budapest, Hungary
Duration: 10 May 200915 May 2009

Publication series

NameLecture Notes in Computer Science
ISSN (Print)0302-9743


Conference4th International Workshop on Agents and Data Mining Interaction


  • complex systems
  • sponsored search
  • keyword advertising
  • collaborative filtering
  • power laws
  • community detection


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