Sang Pil Han
Assistant Professor of Information Systems
City University of Hong Kong
September 16, 2013
Speakman Hall 200, 10:00am – 11:30am
Seminar Title: Cross Channel Synergies between Web and Mobile Advertising: A Randomized Field Experiment
Abstract
As companies divert more funds from traditional media towards digital advertising, they are interested in understanding what effects the two channels of advertising—web advertising and mobile advertising—have on consumer choices. Any analysis that measures the effects of web and mobile advertising only separately remains incomplete. In this paper, we design and execute a randomized field experiment to estimate causal effects of cross-channel interdependence between web and mobile advertising. We conduct a consumer-level analysis to attribute cross-channel advertising to click-throughs and conversions at the individual consumer-level. This helps isolate the effect of complementarity or substitution across platforms (web and mobile) from the role of the quantity of advertising, confound with carry-over, and consumer heterogeneity. We find that a mix of online and mobile display ad acts as a better memory cue that triggers consumers to recall product and eventually click/purchase, as compared to either online ad only or mobile ad only. Hence, in channel planning, optimal decisions in one need to take account of the effects in the other. Further, we present results from policy simulations regarding the optimal level of web and mobile advertising using CPM (cost per thousand impressions) based pricing. These synergistic relationships run counter to the single-click methodology in use and suggest that, for a market in which advertising dollars are allocated based on their influence on purchase behavior, new methods must be developed to insure efficient market functioning.