Sponsored search and organic listings in online food delivery platforms: The role of keyword categories

Abstract

Online sellers appear in search results through sponsored listings (paid advertising links) or organic listings (unpaid links) based on their associations with keywords in consumer search queries. This approach allows sellers to deduce consumers' purchasing preferences, thereby ultimately increasing their economic payoffs. Therefore, selecting appropriate keywords is critical for online sellers. Although previous research has explored the effectiveness of keyword categories in traditional e-commerce settings (e.g., online retail), there are limited studies within the quick e-commerce context (e.g., online food delivery). Moreover, the extent to which keyword categories influence the spillover effects between sponsored and organic listings remains unclear. This study leverages a large panel dataset from an online food delivery platform to analyze the impact of keyword categories on the performance of both sponsored and organic listings. We also examine how keyword categories moderate the spillover effects of sponsored listings on competitors' performance in organic listings. The results reveal that dish keywords achieve the highest click-through rate (CTR), whereas cuisine keywords lead to the lowest conversion rate (CVR). Furthermore, sponsored listings reduce competitors' CTR in organic listings, although this adverse effect is not significant for seller keywords. However, sponsored listings increase the CVR of competitors in organic listings, and this positive spillover effect is exclusively limited to seller keywords. These findings have direct implications for sellers in online food delivery markets in terms of effective keyword selection and for online food delivery platforms in terms of informing more profitable keyword sets.