Mingyu Joo

Online Users Shy Away from Sponsored Listings

ilseu — Tue, 28 Nov 2023 21:03:34 +0000

Online Users Shy Away from Sponsored Listings ilseu Tue, 11/28/2023 - 13:03 More News David Danelski (david.danelski@ucr.edu) | UCR News November 28, 2023

Sometimes it doesn’t pay to advertise.

Such are the findings of a study led by a UC Riverside business professor that examined the value of participating in the “sponsored” product advertising spaces offered by major online shopping platforms such as Amazon.com and eBay.

Mingyu "Max" Joo, assistant professor of marketing

Sellers pay platforms advertising fees per click for such spots, which label the products as “sponsored” or, on some platforms, as “ad,” and place them in designated ad slots blended into search query results viewed by consumers. Platforms and sellers expect the “sponsored” and “ad” signs to be more visually prominent.

Consumers, however, tend to view sponsored listings with suspicion and often prefer to click on what are called “organic” listings that appear high in their product search results but are not sponsored, said Mingyu “Max” Joo, an assistant professor of marketing in UCR’s School of Business and lead author the study. Platforms and sellers expect the “sponsored” and “ad” signs to be visually prominent.

In fact, a sponsored listing can be detrimental when it replaces a seller’s organic listing that would have appeared in the top few positions in the search results. In these situations, consumers are more likely to click and purchase the same product when it appears as an organic listing.

The study was based on the analysis of 448,417 sponsored and organic listings for 8,720 unique products from a leading e-commerce platform in India accessed through a mobile device app.

It’s a matter of trust, Joo said.

“Customers don’t trust a seller’s self-promotion they perceive in sponsored listings,” Joo said. “If there is something in the second position that is subsidized by the seller, the subsidized product is not perceived as the actual number two.”

On the contrary, high-ranking organic listings come with the sense of a third-party stamp of approval. Consumers view the platform’s algorithms that rank seller listings as a credible evaluator, Joo said.

Sponsorships, however, are still good investments in certain situations. Sponsorships can pay off when sellers’ listings organically appear far down in the consumer’s product query results and may not be frequently exposed to consumers. This is because the sponsorship advertising may increase the seller’s exposure and the benefits from the incremental exposure may offset the losses from the ad avoidance and per-click ad cost.

Additionally, the type of product matters. When consumers seek clothing or fashion items, the consumers do not avoid “sponsored” listings because they make choices based on how the products look and worry less about the “trustworthiness” of a seller that carries the products. But for products that result in future user experiences, such as consumer electronics, shoppers prefer to purchase from a trusted source, that is, the highly ranked organic listing, the study found.

The study’s finding presents a conundrum for sellers. They do best when their organic listings appear high in the results of consumer product searches. Yet, what data is used and prioritized by the platform algorithms that produce product search results are closely regarded secrets, Joo said.

Titled “Do Sellers Benefit from Sponsored Product Listings? Evidence from an Online Marketplace,” the study is available online in the journal Marketing Science. Its co-authors are graduate student Jiaqi Shi and associate professor Vibhanshu Abhishek, both of UC Irvine.

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Professor Max Joo Wins Long Term Impact Award

avija016 — Wed, 19 Jul 2023 16:56:04 +0000

Professor Max Joo Wins Long Term Impact Award avija016 Wed, 07/19/2023 - 09:56 More News David Danelski (david.danelski@ucr.edu) | Inside UCR July 17, 2023

Mingyu "Max" Joo, assistant professor of marketing

A study that UCR School of Business assistant professor Mingyu “Max” Joo published back in 2014 continues to be highly influential.

“Television Advertising and Online Search” has been cited in 214 other business research papers, including 36 papers published since the beginning of last year, according to Google Scholar.

In recognition of such success, the INFORMS Society for Marketing Science recognized Joo with the Don Morrison Long Term Impact Award during a recent conference in Miami. The annual award goes to scholars who have made “a significant long-run impact on the field of marketing.”

“It is a great honor and we have never expected this paper to be recognized by the prestigious Long Term Impact award,” Joo said.

Joo, a marketing professor at UCR’s School of Business, examined how television advertising stimulates Google searches. Using internal Google data and collaborating with Google staff, Joo and his co-authors detailed how television ads for financial services increased both the number of related Google searches and searchers' tendency to use branded keywords in place of generic keywords. The study also identified how these cross-media effects are essential to the planning, executing, and evaluating of both television and online search advertising campaigns.

Firms that ignored such cross-media effects likely spent too much on digital ads and too little on television, Joo said in a statement to INFORMS Society. But today, agencies measure how offline ads increase digital traffic to allow for more cost-effective advertising campaigns.

“At the time we wrote this article, we were hopeful to influence the shift, and we are happy to observe practitioners’ higher attention to the cross-media spillovers,” Joo said.

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Professor is Finalist for Long-term Impact Award

ilseu — Wed, 19 Apr 2023 21:58:52 +0000

Professor is Finalist for Long-term Impact Award ilseu Wed, 04/19/2023 - 14:58 More News David Danelski (david.danelski@ucr.edu) | UCR News April 15, 2023

Mingyu “Max” Joo, assistant professor of marketing

Mingyu “Max” Joo, assistant professor of marketing in UCR’s School of Business, has been named one of five finalists for the Don Morrison Long Term Impact Award for a journal article based on his dissertation research that explores television advertising and related online searches. A winner is expected to be announced at the Marketing Science Conference in Miami early June.

The award is provided by INFORMS Society for Marketing Science. It goes to authors of research articles published in Marketing Science and Management Science between 2013 and 2017 that have had significant long-run impacts in the field of marketing. The finalists all had at least 150 citations on Google Scholar.

Joo’s paper, “Television Advertising and Online Search,” was published in 2014 and has been cited 205 times, according to Google Scholar. It detailed how television advertising for financial services increased both the number of related Google searches and searchers' tendency to use branded keywords in place of generic keywords. It identified cross-media effects essential to the planning, executing, and evaluating of both television and online search advertising campaigns.

This is the third time Joo has been a finalist for the long-term impact award.

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UCR-led Study Seeks Online Advertising Protocols

ilseu — Thu, 16 Feb 2023 00:41:48 +0000

UCR-led Study Seeks Online Advertising Protocols ilseu Wed, 02/15/2023 - 16:41 More News David Danelski (david.danelski@ucr.edu) | UCR News February 14, 2023

Several Internet business experts see a technology that has made cryptocurrencies possible as a panacea to today’s online advertising accountability woes that stem from ad-tech giants hoarding the ad engagement data in their walled gardens.

Mingyu “Max” Joo, assistant professor of marketing

These experts now call for “Blockchain” technology to provide transparency to level the playing field. Blockchain ushered in cryptocurrencies little more than a decade ago by making two-party financial transactions transparent, permanent, and impossible to alter.

If applied to online advertising, these experts claim, Blockchain could transparently share the true number of clicks and other engagement measures the ads receive and determine their true value.

But UCR School of Business Marketing Assistant Professor Mingyu “Max” Joo and his co-authors argue in a forthcoming paper that Blockchain technology itself may not resolve the advertising accountability problems because the current systems only serve for two-party financial transactions. They call for development of a more robust online adverting transaction system that requires the participation of all three parties: advertisers, publishers, and consumers.

“To achieve transparency and efficiency of the online advertising marketplace, a system needs to simultaneously serve for the entire three parties, yet there's no complete system for that,” Joo said. Without consumer participation, as well as advertisers and publishers, the ad engagement is still not fully verifiable.

Experts are calling for reforms because giant ad-tech platforms like Google and Facebook now monopolize advertising performance data – the number of views, clicks, engagement metrics, and placements – that is used to determine the ad costs. Ad data transparency would make online ad transactions auditable and help prevent ongoing disputes and lawsuits over the value and reach of online advertising.

Advertisers must rely on intermediaries, including Google and Facebook, to place ads on the sites of thousands of publishers they partner with and to report where their ads appear and how many ad impressions reach end users. Publishers, such as MSN.com, YouTube.com, and NYTimes.com, also rely on these intermediaries in determining the compensation they deserve for their ad spaces.

The stakes are high. Some $250 billion was spent on digital advertising in the United States in 2022, according to Insider Intelligence, which tracks Internet business information and trends. Nearly half of online advertising spending now goes to intermediaries or ad-tech platforms.

Conceptual image (Getty Images/Tippapatt)

In their paper, published in the International Journal of Research in Marketing, Joo and his co-authors reviewed Blockchain, a form of what’s called Distributed Ledger Technology (DLT), and other available DLTs and found that none is ready to serve for the online advertising marketplace.

They recommend development of a new system that makes engagement metadata transparent, while also protecting consumer privacy and advertiser brand safety.

Here are some of design considerations recommended by Joo et al. for an advertising focused DLT system, extending the existing two-party transaction systems:

Identifiable consumers would be able to opt in or out of participation. This would allow for advertising delivery to be verifiable and exclude unwanted contents. It also helps avoid bot-driven fraudulent actions. So, publishers should offer consumers incentives to participate in the DLT system, such as free or reduced-priced content.
Publisher credibility would be evaluated for advertiser brand safety, so that unscrupulous publishers do not engage.
All paid advertising metadata, such as when and where it appeared, should be transparently shared between advertisers and publishers. Such data should include consumer engagements like how long an ad is displayed on a consumer’s device, whether the ad was clicked, and how consumers respond by liking, rating, or blocking ads. Yet, limitations should be imposed on what information can be gathered so customers have privacy safeguards.
Publishers would be free to choose or combine their business models to sell their ad spaces. For example, a publisher could announce a flat fee for an ad, and then allocate the ad to the first advertiser who agrees to pay the asking price. Or a publisher could announce an auction for ad display, and then allocate the ad spaces to the highest bidder.

This rework would go beyond the transparency that had been produced for nearly century by third-party auditors, such as Nielsen Media Research, in the analogue world of print newspapers, magazines, and broadcast radio and television. Implementation of such recommendations, however, would be challenging.

“There is a chicken-and-egg problem, where a platform that may invest to make the new ecosystem happen may not benefit enough from it,” Joo said.

The advertiser inertia to stay within the current ecosystem governed by the ad-tech giants like Google and Facebook would be huge, due to the large ad audience and publisher network.

“So, there is a lack of momentum in the development of the new advertising ecosystem,” Joo said. “The new technology itself cannot be a magic wand for everything, and there are a lot of specific design considerations to be implemented for a better online advertising marketplace.”

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(Header photo: Getty Images/Yuliya Taba)

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Investigations into Cruise Industry Pricing

ilseu — Tue, 19 Jan 2021 20:30:44 +0000

Investigations into Cruise Industry Pricing ilseu Tue, 01/19/2021 - 12:30 More News Laurie McLaughlin January 19, 2021

For Assistant Professor Mingyu Joo, there is an important equilibrium to attain in the pursuit of research as he explores the many facets of marketing and publishes his findings.

“As a researcher, I have learned—and still try to improve—how to provide scientifically rigorous answers to practically relevant questions in the research projects I am conducting,” says Joo, whose primary research investigates practical problems in advertising, pricing, and product design using quantitative modeling methods. “Firms’ short-term motives are often misaligned with scientific requirements of rigor and transparency. Therefore, offering an actionable guidance to firms’ managerial problems using rigorous methodology is not always straightforward.”

Mingyu Joo

That two-pronged approach—attention to both the precision and the pragmatism within his research—has earned Joo some of academia’s highest honors: In 2015, he won the John Little Award and was a finalist for the Frank Bass Award—both best-marketing paper accolades he considers lifetime achievements.

In 2019, Joo co-authored “Advertising and brand attitudes: Evidence from 575 brands over five years” published in Quantitative Marketing and Economics, which earned a 2020 Buzzell Best Paper finalist honor from the Marketing Science Institute.

Most recently, “Temporal Distance and Price Responsiveness: Empirical Investigation of the Cruise Industry,” a UC Riverside-led study co-authored by Joo, was published in Management Science in July 2020. He also currently serves as an associate editor for both Decision Sciences and Information Economics and Policy.

While he’s firmly established a reputation for his research, his life’s work is shaped by his time in the classroom, where the lively interaction daily confirms his decision to teach. “Business environments are dynamically changing these days, so our classroom discussions on the latest business issues and analyses about key factors in success—or failure—offer meaningful challenges for my students and me,” says Joo, who joined the UCR faculty in 2018 and was previously an assistant professor at The Ohio State University.

“The supportive and collegial environment of UCR School of Business has helped me perfectly balance my efforts between producing new knowledge and conveying such knowledge to the next generation,” he adds. With this goal in mind, he also organizes the Field Colloquia speaker series for Ph.D. students and faculty members featuring well-recognized scholars from across the U.S.

And, just like their professor, Joo’s students are continuously looking for new information and answers to immediate questions within the industry, which allows Joo the deep dive into the industry that he relishes: “My students always demand the latest knowledge in the field.”

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Counterintuitive Price Response Helps Rebound

ilseu — Mon, 11 Jan 2021 16:42:01 +0000

Counterintuitive Price Response Helps Rebound ilseu Mon, 01/11/2021 - 08:42 More News Holly Ober December 08, 2020

A UC Riverside-led study on cruise pricing could help the cruise industry get back on its feet after the pandemic. The research, published in Management Science, found that customers who book early in the advance sales period are less sensitive to ticket prices, while customers who book late are more sensitive to price changes, even though there are fewer cabins left.

“Those most likely to sail (post-pandemic) are loyalists who do not necessarily move based on price discounts,” said Mingyu Joo, a UC Riverside assistant professor of marketing.

Mingyu Joo

The findings contradict conventional wisdom from airlines, where early buyers shop for lower prices and late buyers facing fewer seats and choices accept higher prices. The research suggests the post-pandemic cruise industry should plan ticket sales to attract loyalists, who book early, and focus on value more than price.

Joo and Kenneth C. Wilbur at UC San Diego obtained booking data from a leading cruise company for 2004. The data include all two-person cabin sales. Each sales record specified the purchase date, price paid, departure date, itinerary, and cabin type. The researchers analyzed 11 itineraries and three cabin types that collectively accounted for 397,498 bookings, more than 90% of all tickets sold by the firm.

Cruise tickets were sold up to a year in advance. However, 99.4% of bookings occurred during the final 40 weeks, with the final 20 weeks accounting for 87% of all tickets sold. Each cruise’s price changed weekly over the advance sales period.

Customers buying high-price itineraries often booked tickets earlier, while those booking low-price itineraries tended to buy later.

Early buyers were less sensitive to price changes than late buyers, behaving like “loyalists” less likely to respond to fluctuations around the average price. This suggests that perceived experiential value of the cruise mainly influenced their behavior.

Late buyers were driven by bargain-seeking behavior, with high responsiveness to price fluctuations. Their behavior was that of newcomers inclined to shop prices. The firm's policy of raising prices as the advance sales period progressed worked because the increase in demand was enough to offset sales lost due to increased price.

For an industry shattered by the COVID-19 pandemic, the time-based segmentation in cruise consumer price responses offers a pathway to recovery once it is safe to sail again.

“The cruise industry, in handling pandemic-driven cancellations, may prioritize the consumers who previously booked early in the advance sales period, when allocating promotional resources right after the pandemic,” Joo said. “The cruise industry can also open up post-pandemic tickets for booking as early as possible, as optimistic loyalists may tend to plan far ahead. Both tactics may attract those loyalists who plan early to book tickets for the first post-pandemic sails.”

Joo warns that big post-pandemic discounts to attract new customers may not be effective. Those who never cruised may be risk-averse and go on a cruise only when really big discounts are offered or when the COVID-19 risk is completely gone.

“The industry needs to carefully evaluate the tradeoff between having more sales with deep discounts and focusing on loyalists at reasonable prices and with more value-focused promotions,” Joo said.

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