The impact of consumer search behavior on search advertising in the hotel industry

This chapter proposes a conceptual framework to encapsulate our understanding of how consumers' search behavior influences the content in search advertising in the hotel industry. We suggest that firms can better match consumers' preferences and needs by embracing a trade-off between price information and product information in search advertising. The dynamics of this trade-off is driven by consumers' prior product knowledge and the type of advertisers in the competitive market. Our framework suggests that travel agents tend to focus more on price advertising in their search ads, whereas hotels do not change their level of price advertising in a competitive market. More interestingly, competition from travel agents and hotels has different effects on the content of search advertising by travel agents and hotels. Our study provides critical insights in responding to different market conditions, which enhance the understanding of firms' behaviors in designing their search advertising content.