Advertising Effectively Influences Older Users: How Field Experiments Can Improve Measurement and Targeting

Advertising Effectively Influences Older Users: How Field Experiments Can Improve Measurement and... Does advertising measurably affect sales? New technologies for tracking individuals’ sales and ad exposure facilitate studying a nationwide retailer’s online brand advertising effectiveness. A controlled experiment on 1,577,256 existing customers measures the causal effect of advertising on purchases, overcoming the attribution problem by exogenously varying ad exposure. The advertising produced a statistically and economically significant effect on in-store sales. The experiment permits a demographic breakdown. Surprisingly, the effects are large for the elderly. Customers aged 65+, comprising only 5 % of customers, increased purchases by 20 % due to the advertising. This represented 40 % of the total effect among all ages. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Advertising Effectively Influences Older Users: How Field Experiments Can Improve Measurement and Targeting

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Publisher
Springer US
Copyright
Copyright © 2013 by Springer Science+Business Media New York
Subject
Economics / Management Science; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-013-9403-y
Publisher site
See Article on Publisher Site

Abstract

Does advertising measurably affect sales? New technologies for tracking individuals’ sales and ad exposure facilitate studying a nationwide retailer’s online brand advertising effectiveness. A controlled experiment on 1,577,256 existing customers measures the causal effect of advertising on purchases, overcoming the attribution problem by exogenously varying ad exposure. The advertising produced a statistically and economically significant effect on in-store sales. The experiment permits a demographic breakdown. Surprisingly, the effects are large for the elderly. Customers aged 65+, comprising only 5 % of customers, increased purchases by 20 % due to the advertising. This represented 40 % of the total effect among all ages.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Dec 20, 2013

References

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