Is the Money Spent on Short-Form Video Social Platforms Worth It? The Role of Advertising Spillover in a Large-Scale Randomized Field Experiment on ByteDance

Yitian (Sky) Liang (), Xinlei (Jack) Chen (), Shengnan Han (), Jinglong Zhang () and Yubo Chen ()
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Yitian (Sky) Liang: School of Economics and Management, Tsinghua University, Beijing 100190, China
Xinlei (Jack) Chen: Cheung Kong Graduate School of Business, Beijing 100006, China
Shengnan Han: Independent Researcher, Beijing 100163, China
Jinglong Zhang: Faculty of Business for Science and Technology, School of Management, University of Science and Technology of China, Hefei 230026, China
Yubo Chen: School of Economics and Management, Tsinghua University, Beijing 100190, China

Marketing Science, 2025, vol. 44, issue 5, 1125-1144

Abstract: Short-form videos have taken over social media and attracted attention from advertisers. But doubts remain about the advertising efficacy on these platforms. In a large-scale randomized experiment on ByteDance, we show that advertising spillover plays a pivotal role in the advertising campaign. Most of the advertising effect comes from advertising spillover beyond ByteDance with exposed users being eight times more likely to convert from outside than from within ByteDance. When considering advertising spillover outside ByteDance, the average cost per conversion, which brands commonly use to evaluate the cost of campaigns, shrinks by 5 or 25 times, depending on the methods used to calculate it. Advertising spillover can also affect a brand’s targeting strategy. Whereas commonly used demographic variables by the automobile brand are effective for target marketing with only platform data, they are not when considering advertising spillover outside ByteDance. Instead, a behavioral variable proposed herein (prior brand home page visits) effectively moderates the advertising effect but has no impact when ignoring advertising spillover in the analysis. Our findings underscore the importance of information sharing between platforms and brands, which in practice is typically not the case.

Keywords: digital advertising; ad platform; ad spillover; advertising effect (search for similar items in EconPapers)
Date: 2025
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