Effect of temporal spacing between advertising exposures: Evidence from online field experiments

Navdeep S. Sahni ()
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Navdeep S. Sahni: Stanford University

Quantitative Marketing and Economics (QME), 2015, vol. 13, issue 3, No 2, 203-247

Abstract: Abstract This paper aims to understand the impact of temporal spacing between ad exposures on the likelihood of a consumer purchasing the advertised product. I create an individual-level data set with exogenous variation in ad exposure and its spacing by running online field experiments. Using this data set, I first show that (1) ads significantly increase the likelihood of the consumers purchasing from the advertiser and (2) this increase carries over to future purchase occasions. Importantly, I also find evidence for the spacing effect: the likelihood of a product’s purchase increases if it’s ads are spread apart rather than bunched together, even if spreading apart involves shifting some ads away from the purchase occasion. Accounting for the spacing effect is important to detect the effects of repeated advertising. Because the traditional models of advertising do not explain the data patterns, I build a new memory-based model of how advertising influences consumer behavior. Using a nested test, I reject the restrictions imposed by the canonical goodwill stock model (Nerlove and Arrow, Economica, 29(114):129–142, 1962), in favor of the memory-based model I propose. Additionally, I use the estimated parameters to simulate counterfactual scenarios and show that the advertisers’ profits might be lower if the features of the memory model are not accounted for.

Keywords: Advertising; Search advertising; Spacing effect; Temporal spacing; Repeated advertising; ACT-R model; Cognitive psychology; Memory-based model; Long-term effects of ads; Carryover effects; Goodwill model; Advertising frequency; Memory model; Online advertising; Internet advertising; Randomized experiments; Randomized field experiments; Field experiments (search for similar items in EconPapers)
JEL-codes: D03 D12 D91 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 (34)

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DOI: 10.1007/s11129-015-9159-9

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