Display advertising’s competitive spillovers to consumer search

Randall Lewis and Dan Nguyen ()
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Dan Nguyen: University of Chicago Booth School of Business

Quantitative Marketing and Economics (QME), 2015, vol. 13, issue 2, No 1, 93-115

Abstract: Abstract We find display advertising influences customer search for both the advertised brand and its competitors. We exploit a natural experiment that randomizes ad delivery on 500 million visits to the Yahoo! homepage and compare visitors’ subsequent activities on Yahoo! Search. In three advertisers’ campaigns, display ads increase searches for advertised brands by 30–45 % and for competitors’ brands by up to 23 %. Strikingly, the total number of incremental searches for competitors is 2–8 times the increase for advertisers’ brands. We discuss how these spillovers create strategic complementarities for search advertisers and reduce firms’ investments in advertising.

Keywords: Advertising; Natural experiment; Externality; Search; Competition; Complements; Strategic complements (search for similar items in EconPapers)
JEL-codes: D83 L86 M31 M37 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

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DOI: 10.1007/s11129-015-9155-0

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