The Impact of “Retail Media” on Online Marketplaces: Insights from a Field Experiment

A part of retail media wherein sponsored product listings are interleaved with organic product listings in the search results is a large and growing phenomenon. In this paper, we study the impact of displaying sponsored listings at top positions for the platform. Analyzing data from a large-scale field experiment at a leading online marketplace in India, we find nuanced results that substantially vary across product categories. In the electronics category, the sponsored listings receive fewer clicks than the organic listings that they replace. Surprisingly, this effect is reversed in the clothing category, in which the ads perform better than the displaced organic listings, suggesting that sponsored listings might help the platform identify new high-relevance products and improve search rankings for these categories. At the search level, we find that increasing the fraction of sponsored listings (by about 10% points) in the search results does not affect the performance in any product category. This implies that ads bring in additional revenue for the marketplace yet do not hurt overall consumer response (in the short run). We theorize that the variation across categories occurs because of differing degrees of information asymmetry on product relevance between the marketplace and the sellers.

• 저널Information Systems Research · 36(1) · 456–473
• 토픽Consumer Market Behavior and Pricing · Marketing
• DOI10.1287/isre.2022.0188
• 저자Vibhanshu Abhishek, Kinshuk Jerath, Siddhartha Sharma