It is a popular misconception that an increase in demand coupled with an increase in price is sufficient to make a good a Giffen good. This is false. First, t

It is a popular misconception that an increase in demand coupled with an increase in price is sufficient to make a good a Giffen good. This is false. First, the good must be inferior (demand decreases when income rises), which search advertising is probably not. Second, the increase in demand must be because the income effect (the increase in price acts like a decrease in income, so you will buy more of the good since it is inferior) is greater than the substitution effect (you will buy less of the good because its price relative to substitute goods increased). It's not clear this is the mechanism at work here. Just because an increase in price causes an increase in demand doesn't make search advertising a Giffen good. This is a necessary, but not sufficient condition.