Observational methods often fail to accurately recover the treatment effects generated from randomized advertising experiments on Facebook.
Measuring the causal effects of digital advertising remains ...challenging despite the availability of granular data. Unobservable factors make exposure endogenous, and advertising’s effect on outcomes tends to be small. In principle, these concerns could be addressed using randomized controlled trials (RCTs). In practice, few online ad campaigns rely on RCTs and instead use observational methods to estimate ad effects. We assess empirically whether the variation in data typically available in the advertising industry enables observational methods to recover the causal effects of online advertising. Using data from 15 U.S. advertising experiments at Facebook comprising 500 million user-experiment observations and 1.6 billion ad impressions, we contrast the experimental results to those obtained from multiple observational models. The observational methods often fail to produce the same effects as the randomized experiments, even after conditioning on extensive demographic and behavioral variables. In our setting, advances in causal inference methods do not allow us to isolate the exogenous variation needed to estimate the treatment effects. We also characterize the incremental explanatory power our data would require to enable observational methods to successfully measure advertising effects. Our findings suggest that commonly used observational approaches based on the data usually available in the industry often fail to accurately measure the true effect of advertising.
The online appendix and data files are available at
https://doi.org/10.1287/mksc.2018.1135
.
With web advertising growing to be a huge industry, it is important to understand the effectiveness of web advertisement. In this study we investigate the effects of web advertising visual design ...(WAVD) purchasing intention within the framework of an integrated model. Nine hypotheses were developed and tested on a dataset of 316 observations collected via a questionnaire survey. The results of structural equation modeling (SEM) indicate that while web advertising visual cues influence consumers' purchasing intention through advertising attitudes and brand attitudes, they do not have direct effects on purchasing intention. Further results on the moderating role of gender suggest that web advertising visual cues have direct effect on consumers' purchasing intention for male groups but not for female groups. This study contributes to the understanding the role of visual dimensions in forming online purchase intentions.
•A model of the effects of web advertising visual design (WAVD) is proposed.•Structural equation model (SEM) is adopted to test the model.•WAVD positively influences online purchase intention via attitudinal effects.•Gender moderates the effect of WAVD on consumers' attitudes and purchase intention.
•Advertising content embedded in social media positively affects visual attention.•Advertising content embedded on social media does not affect consumer engagement.•UGC valence-ad congruence has no ...interaction effect on ad recall.•Ad congruence impacts on ad recall and visual attention.•Congruent ad-media contexts are peripheral cues in message processing.
Drawing on cognitive load theory, congruence research, and dual processing models, the purpose of this study is to determine the effectiveness of online advertising in social media. To this end, three separate studies were conducted. First, using eye-tracking and electroencephalography, we examine the differences, based on whether or not an ad is embedded, in subjects’ visual attention and engagement in a TripAdvisor webpage. Our findings showed that synergies between social media content and advertising content positively affect users’ visual attention. A second study, using an online survey, assessed the impact of congruent/incongruent ads on ad recall. A third study, using eye-tracking, assessed the impact of congruent/incongruent ads on visual attention. Our findings suggest that consumers exposed to online ads for very limited time periods rely on less effortful, more heuristic, context-based processing strategies. Congruent ad-media contexts can act as peripheral cues, activating knowledge structures and facilitating message processing.
Two experiments examined the impact of Twitter followers, electronic word-of-mouth (eWoM) valence, and celebrity type (prosocial versus antisocial) on consumer behavior in Twitter-based marketing ...communication, applying social capital theory, social identity theory, source credibility, and extant literature on eWoM. Experiment 1 demonstrated the main effect of number of followers on source credibility, and the interaction effect between eWoM valence and number of followers on product involvement, buying intention, and intention to pass along eWoM. Experiment 2 revealed the interaction effect of celebrity type and number of followers on social identification with the celebrity as well as the mediating effect of social identification.
Firms using online advertising regularly run experiments with multiple versions of their ads since they are uncertain about which ones are most effective. During a campaign, firms try to adapt to ...intermediate results of their tests, optimizing what they earn while learning about their ads. Yet how should they decide what percentage of impressions to allocate to each ad? This paper answers that question, resolving the well-known “learn-and-earn” trade-off using multi-armed bandit (MAB) methods. The online advertiser’s MAB problem, however, contains particular challenges, such as a hierarchical structure (ads within a website), attributes of actions (creative elements of an ad), and batched decisions (millions of impressions at a time), that are not fully accommodated by existing MAB methods. Our approach captures how the impact of observable ad attributes on ad effectiveness differs by website in unobserved ways, and our policy generates allocations of impressions that can be used in practice. We implemented this policy in a live field experiment delivering over 750 million ad impressions in an online display campaign with a large retail bank. Over the course of two months, our policy achieved an 8% improvement in the customer acquisition rate, relative to a control policy, without any additional costs to the bank. Beyond the actual experiment, we performed counterfactual simulations to evaluate a range of alternative model specifications and allocation rules in MAB policies. Finally, we show that customer acquisition would decrease by about 10% if the firm were to optimize click-through rates instead of conversion directly, a finding that has implications for understanding the marketing funnel.
Data is available at
https://doi.org/10.1287/mksc.2016.1023
.
The study presents a framework for the analysis of advertising in digital games. It reviews literature on in-game advertising, advergames and advertising in social network games. The framework ...distinguishes between stimulus characteristics of the game as well as of the advertising that lead to psychological responses toward the game and the brand and to actual behavior toward the game and the brand. It takes into consideration individual factors of the player and social factors surrounding the player. In addition, theoretical models of advertising perception in digital games and issues regarding regulation are addressed. Directions for future research in the area of advertising in digital games are provided.
We use data from a large-scale field experiment to explore what influences the effectiveness of online advertising. We find that matching an ad to website content and increasing an ad's obtrusiveness ...independently increase purchase intent. However,
in combination
, these two strategies are ineffective. Ads that match both website content
and
are obtrusive do worse at increasing purchase intent than ads that do only one or the other. This failure appears to be related to privacy concerns: the negative effect of combining targeting with obtrusiveness is strongest for people who refuse to give their income and for categories where privacy matters most. Our results suggest a possible explanation for the growing bifurcation in Internet advertising between highly targeted plain text ads and more visually striking but less targeted ads.
China is undergoing a transition from offline to online advertising, but little is known about the causal relationship regarding credibility transfer from non-web advertising to web advertising. ...Meanwhile, web advertising usage behaviour is largely overlooked. The purpose of this study is to explore the formation of customers' attitude towards web advertising (ATT) which further impacts their online information acquisition behaviour, from the perspectives of advertising value and credibility transfer. This paper develops a research model drawing upon advertising value, credibility transfer, ATT and tie. Data collected from Chinese online shopping customers were used to test the model. The results indicate that perceived informativeness, perceived entertainment and credibility contribute to the formation of ATT, which further impacts web advertising usage for getting information. Meanwhile, tie positively moderates the credibility transfer from non-web advertising to web advertising. These findings and their implications for theory and practice are discussed.
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