Do mobile banner ads increase sales? Yes,in the offline channel

Firms allocate increasingly large budgets to mobile banner advertising. Yet, existing research paid only scant attention to the sales effects of mobile banner ads. In this paper, we fill this gap by determining the offline and online sales impact of a large-scale mobile banner advertising campaign. As part of a geographical field experiment, over 3.5 million mobile banner ads were served to a predetermined geographical area. We determine the offline and online sales effects of the mobile banner ad campaign by analyzing twenty months of sales data for regions covering the entire country of the Netherlands. Relying on a difference-in-difference approach and two matching methods, we demonstrate an offline sales increase of around 2%. The online sales effect is not significant. We conclude that firms can use mobile banner advertising to boost offline sales. We find no evidence for cross-channel sales cannibalization.     

Cross-channel effects of omnichannel retail marketing strategies: A review of extant data-driven research

The authors review 50 empirical retailing research papers that have appeared over the last 20 years to take stock of what we know, need to know better, and do not know yet about within-retailer cross-channel effects of omnichannel retail marketing strategies on (a) consumer responses over their purchase journeys, i.e., online and/or offline search, purchase intention, frequency, amount, returns, loyalty, and (b) the retail firm's aggregate outcomes (e.g., sales, costs, profits, product returns) by channel and overall. Specifically, the authors focus on five strategies: (1) the addition of online channel by an offline retailer; (2) the addition (or subtraction) of offline channels by an online retailer; (3) addition of mobile shopping channel (website and/or app) by offline and/or online retailer; (4) cross-channel integration strategies; and (5) retail marketing mix strategies. The author/s integrate findings from empirical research on these strategies into a number of ‘insights’ about ‘what we know’. Prominent among these are the following: Adding a transactional online channel to an offline channel improves the retailer's overall sales even though offline channel sales can be cannibalized to some degree. Adding an offline channel by an online retailer, however, boosts online channel sales as well as overall sales of the retailer. Similarly, adding a mobile shopping channel usually increases customer purchase frequency and amount and overall sales of the retailer in the long-term. Strategies for greater cross-channel integration generally have a positive effect on a retailer's overall performance while online advertising has positive effects on offline channel consideration and sales as well as overall sales of a multichannel retailer. Other insights or findings that need further study or open questions are also identified. The paper closes with managerial implications of the derived empirical insights, and suggestions for future research.     

The impact of online display advertising and paid search advertising relative to offline advertising on firm performance and firm value

This research examines the impact of online display advertising and paid search advertising relative to offline advertising on firm performance and firm value. Using proprietary data on annualized advertising expenditures for 1651 firms spanning seven years, we document that both display advertising and paid search advertising exhibit positive effects on firm performance (measured by sales) and firm value (measured by Tobin's q). Paid search advertising has a more positive effect on sales than offline advertising, consistent with paid search being closest to the actual purchase decision and having enhanced targeting abilities. Display advertising exhibits a relatively more positive effect on Tobin's q than offline advertising, consistent with its long-term effects. The findings suggest heterogeneous economic benefits across different types of advertising, with direct implications for managers in analyzing advertising effectiveness and external stakeholders in assessing firm performance.     

Internet advertising effectiveness

Online advertising has experienced phenomenal growth since its inception in 1994. This empirical study investigates the impact of seven creative characteristics of banner ads on the effectiveness of online advertising using a multiple regression model. A random sample of 209 banner ads was drawn from a sampling frame of advertisers, provided by an advertising agency specialising in internet advertising for the gaming industry. The findings of this study are broadly consistent with past research into online advertising efficiency, indicating that the creative characteristics of effective banner ads in the online gaming arena include: a larger size, absence of promotional incentives and the presence of information about casino games. In contrast, banner features such as animation, action phrase and presence of company brand or logo were ineffective in generating clickthroughs. Contrary to expectations, long messages on banners were associated with higher click-through rates.     

National advertising,dual-channel coordination and firm performance

With the rapid development of e-commerce, many manufacturers nowadays opt to open an online channel to engage in direct online sales. The mix of retailing with an online channel adds a new dimension of competition and complementarity to a product's distribution channels. Our model focuses on the strategic effect of the manufacturer's national advertising on alleviating the channel competition. We use a game-theoretical model to show that opening an online channel with the added national advertising effectively alleviates the channel conflict and thus helps improve the whole channel and each channel member performance. Depending on the different product categories and the degree of channel substitutability, the manufacturer's investment in the national advertising also will be different. The value of national advertising increases as product is more compatible with online sales and channel substitutability increases.     

Cross channel effects of search engine advertising on brick & mortar retail sales: Meta analysis of large scale field experiments on Google.com

We investigate the cross channel effects of search engine advertising on Google.com on sales in brick and mortar retail stores. Obtaining causal and actionable estimates in this context is challenging: Brick and mortar store sales vary widely on a weekly basis; offline media dominate the marketing budget; search advertising and demand are contemporaneously correlated; and estimates have to be credible to overcome agency issues between the online and offline marketing groups. We report on a meta-analysis of a population of 15 independent field experiments, in which 13 well-known U.S. multi-channel retailers spent over $4 Million in incremental search advertising. In test markets category keywords were maintained in positions 1-3 for 76 product categories with no search advertising on these keywords in the control markets. Outcomes measured include sales in the advertised categories, total store sales and Return on Ad Spending. We estimate the average effect of each outcome for this population of experiments using a Hierarchical Bayesian (HB) model. The estimates from the HB model provide causal evidence that increasing search engine advertising on broad keywords on Google.com had a positive effect on sales in brick and mortar stores for the advertised categories for this population of retailers. There also was a positive effect on total store sales. Hence the increase in sales in the advertised categories was incremental to the retailer net of any sales borrowed from non-advertised categories. The total store sales increase was a meaningful improvement compared to the baseline sales growth rates. The average Return on Ad Spend (ROAS) is positive, but does not breakeven on average although several retailers achieved or exceeded break-even based only on brick and mortar sales. We examine the robustness of our findings to alternative assumptions about the data specific to this set of experiments. Our estimates suggest online and offline are linked markets, that media planners should account for the offline effects in the planning and execution of search advertising campaigns, and that these effects should be adjusted by category and retailer. Extensive replication and a unique research protocol ensure that our results are general and credible.     

The Direct and Reposting Effects of Advertorials on Sales

Advertorials have been shown to influence advertising recall and brand evaluation. However, no research has examined their impact on sales. This study uses longitudinal data on durable consumer goods in China to assess the extent to which advertorials influence sales. The study finds that advertorials have dual, positive effects on firms’ sales: a direct effect through original copy and a reposting effect through online exposure.     

动态最优控制模型在广告业的应用综述(中)

本文介绍了动态最优控制模型在广告领域的研究进展,主要包括Sethi在1977年总结之后的模型发展。这些模型要回答的基本问题是,如何确定一个或一组相互竞争的企业的最优广告支出和其他可能随时间变化的利益相关因素。模型的最优化描述了这些变量如何转化为销售额,进而转化为利润。本文有两个主要目的。一方面,整理了早期综述文献中已经提到过的领域中产生的新贡献。另一方面,探讨了1977年以来广告学领域出现的新的研究方向。考虑到文章长度,本文将分成上中下三篇刊载。本篇主要介绍了销售—广告响应模型;耐用品的累积销售额模型;广告过程中具有多个状态变量的广告模型。     

Cross-Industrial User Channel Preferences on the Path to Online Purchase: Homogeneous,Heterogeneous, or Mixed?

Though research literature addresses a broad range of advertising impact models, studies on the channel preferences of online purchasers have received little attention, regarding both multichannel settings and channel interplay in click sequences. To provide advertisers a method for better evaluating customer channel preference, this study investigates the path to purchase by building on four multichannel clickstream data sets from three industries, recorded with cookie-tracking technologies. Applying a Cox model and clustering techniques supports delineation of empirical generalizations and industry-specific findings on channel exposure, including their antecedents and distinct channel click sequences. Across data sets, online users show idiosyncratic channel preferences for a limited set of one or two channels rather than multiple online vehicles. Both channel homogeneous click sequences and combinations of two channels (including branded contacts) are effective as purchase predictors. Our study also presents industry-specific results regarding the influence of click sequences on purchase intent, thereby providing insights for advertising research, particularly as are suited to optimization of online advertising activities.     

Soft drink advertising and consumption in the United States 1984–2007

The internet environment has changed the format of internet advertising. One emerging form of online marketing communication is ‘contextual advertising’, in which marketers strive to develop customised images or texts more relevant to customers based on the content of web pages. This study investigates the effectiveness of internet contextual ads. In particular, we examine the effect of internet contextual ads on brand memory (i.e. recall and recognition) and attitudes towards the advertisement and/or brand using the theory of priming effect. We find that the complexity of banner ads moderates the relationship between a contextual advertisement and its effectiveness, and generates two distinct priming effects (i.e. assimilation and contrast effects). The results demonstrate that the internet contextual advertisement enhances brand recognition and induces favourable attitudes towards the ad. In addition, consumers have higher recall rates and attitudes towards the brand when they are exposed to a less complex contextual advertisement or when they are exposed to a complex, non-contextual advertisement.     

The roles of multiple channels in predicting website visits and purchases: Engagers versus closers

In today’s online environment, consumers and sellers interact through multiple channels such as email, search engines, banner ads, affiliate websites and comparison-shopping websites. In this paper, we investigate whether knowing the history of channels the consumer has used until a point of time is predictive of their future visit patterns and purchase conversions. We propose a model in which future visits and conversions are stochastically dependent on the channels a consumer used on their path up to a point. Salient features of our model are: (1) visits by consumers are allowed to be clustered, which enables separation of their visits into intra- and inter-session components, (2) interaction effects between channels where prior visits and conversions from channels impact future inter-session visits, intra-session visits and conversions through a latent variable reflecting the cumulative weighted inventory of prior visits, (3) each channel attracts inter-session and intra-session visits differently, (4) each channel has different association with conversion conditional on a customer’s arrival to the website through that channel, (5) each channel engages customers differently (i.e., keeps the customer alive for a next session or for a next visit within a session), (6) the channel from which there was an arrival in the previous session can have an enhanced ability to generate an arrival for the same channel in the current session (channel persistence), and (7) parsimonious specification for high dimensionality in a low-velocity, sparse-data environment. We estimate the model on easy-to-collect first-party data obtained from an online retailer selling a durable good and find that information on the identities of channels and incorporation of inter- and intra-session visits have significant predictive power for future visitation and conversion behavior. We find that some channels act as “closers” and others as “engagers”—consumers arriving through the former are more likely to make a purchase, while consumers arriving through the latter, even if they do not make a purchase, are more likely to visit again in the future or extend the current session. We also find that some channels engage customers more than others, and that there are interaction effects between the channels visited. Our estimates show that the effect of prior inventory of visits is different from the immediate prior visit, and that visit and purchase probabilities can increase or decrease based on the history of channels used. We discuss several managerial implications of the model including using the predictions of the model to aid in selecting customers for marketing actions and using the model to evaluate a policy change regarding the obscuring of channel information.     

Context effects of TV programme-induced interactivity and telepresence on advertising responses

This article provides an analysis of the relationship between annual advertising expenditures and sales, using a time series regression procedure, for beer, wine, and liquor sold in the United States from 1971 to 2012. Information from these four decades provides a comprehensive analysis of the relationships of numerous variables with aggregate alcohol category sales. Even though per capita alcohol consumption has not changed much throughout this period, alcohol advertising media expenditures for all alcohol beverages have increased almost 400% since 1971. This study has provided evidence of consumption changes across categories of alcohol beverages over the past 40-plus years with the preponderance of those changes significantly correlated to fluctuations in demography, taxation and income levels – not advertising. Despite other macro-level studies with consistent findings, the perception that advertising increases consumption exists. The findings here indicate that there is either no relationship or a weak one between advertising and aggregate category sales. Therefore, advertising restrictions or bans with the purpose of reducing consumption may not have the desired effect. Implications on policy decisions regarding advertising controls are addressed.     

Disclosures Exposed: Banner Ad Disclosure Adherence to FTC Guidance in the Top 100 U.S. Web Sites

With banner ads accounting for one‐fifth of the $16.4 billion spent on Internet advertising in 2006, this advertising format has become an integral marketing communications tool. Inclusion of required disclosure language and presenting those disclosures in a clear and conspicuous manner are important areas of regulatory interest and in recent years have extended to the online environment. This study examines the extent to which disclosures in banner ads in the top 100 U.S. Web sites adhere to Federal Trade Commission guidance in these two areas. Additionally, this study compares the banner ad results for clear and conspicuous presentation to those of a prior study that examined television advertising. All the banner ads in the study contained at least one disclosure; yet, adherence was mixed in terms of providing all the required information clearly and conspicuously. Implications of these results are discussed.     

Investment in online advertising and return on sales: Does it pay to outsource the services to an advertising agency?

Abstract

The effect of investing in online advertising on a firm’s financial outcomes can depend on whether or not the development and implementation of advertising campaigns are managed by advertising agencies. Agencies may have experienced professionals or workload to perform these jobs, but the costs are greater. This paper aims to investigate the effects of investments in digital marketing on the financial outcome of a company’s services, comparing whether or not it is outsourced to advertising agencies. The secondary data relates to services advertised and marketed by a firm. We tested the possible moderating effect of outsourcing the service in the relationship between investment in online advertising (Google and Facebook) and return on sales (profit margin), by controlling the effect of covariates. Through four regression analyses, the results showed that outsourcing the service moderates the relationship. Specifically, the higher the amount of advertising investment, the more it pays to outsource the service to an advertising agency in order to generate greater profit margin. But with a low investment value, it does not pay to outsource. This study helps to identify situations in which it pays to outsource digital marketing services to an advertising agency.     

Consumers’ responses to native vs. banner advertising: moderation of persuasion knowledge on interaction effects of ad type and placement type

Applying advertising contextual theory, we examined the conditions under which native advertising embedded in a news website was more effective. With the use of college students (n = 189), a 2 (type of ad: native vs. banner) × 2 (type of ad placement: solo vs. duo) × 2 (persuasion knowledge: high vs. low) online experimental design was employed. In the solo condition, native advertising was evaluated more favorably than banner advertising in perceived fit, ad credibility, brand attitudes and click intention. Significant interaction effects between ad type and placement type were found on all dependent variables, with native advertising showing a significant decrease in duo (vs. solo) placement. These interaction effects appeared to be more pronounced for consumers with high persuasion knowledge, confirming its moderating role. Theoretical and managerial implications were discussed regarding the strategic placement of native advertising in news websites.     

Estimating the long-term effects of advertising on sales: a co-integration perspective

Co-integration econometrics have important theoretical advantages over more traditional approaches to estimating the long-term effects of one variable on another. When advertising and sales data are co-integrated, adaptations of common econometric procedures may be used to estimate the long-term effects directly rather than inferring them from short-term relationships. This paper presents a method for detecting and estimating co-integrating relationships using ordinary least-squares regression procedures. The method is illustrated with the well-known Lydia Pinkham data from 1907 through to 1961. The results show that there was a strong positive relationship between Lydia Pinkham advertising and sales in the long-term. Implications of the method and findings are discussed.     

The impacts of instructional video advertising on customer purchasing intentions on the Internet

As the application of the Internet has grown rapidly, electronic commerce is expected to become increasingly prosperous. In addition, since the launching of the Internet, more media in advertising have appeared. Online customer experiences and Web 2.0 are believed to be two of the driving forces behind the growth in online sales. A more advanced advertising medium is thus needed to stimulate customers’ purchasing intentions. One creative medium of advertising on the Internet is instructional video advertising. It provides instructions on how to operate the products being sold and/or on how the products function. Hence, the customers may in this way view the advertising, and finally the intention to purchase may be triggered. In order to explore how Internet instructional video advertising may affect customers’ purchasing intentions, we propose a new model that adopts the theory of reasoned action, the technology acceptance model, and others. We perform the survey to analyze how instructional video advertising may impact customers’ purchasing intentions.     

Super returns to Super Bowl ads?

This paper uses a natural experiment—the Super Bowl—to study the causal effect of advertising on demand for movies. Identification of the causal effect rests on two points: 1) Super Bowl ads are purchased before advertisers know which teams will play; 2) home cities of the teams that are playing will have proportionally more viewers than viewers in other cities. We find that the movies in our sample experience on average incremental opening weekend ticket sales of about $8.4 million from a $3 million Super Bowl advertisement.     

Catalogue as a tool for reinforcing habits: Empirical evidence from a multichannel retailer

Retailers are experiencing a systematic shift in the buying habits of their customers as more customers buy across different channels. Marketing managers face the daunting task of embracing online and offline channels to engage consumers, influence choice, and create habits to sustain a competitive advantage. We develop a dynamic segmentation model of channel choice and purchase frequency to assess the responsiveness of segments to catalogues and email communications. In addition, we perform profitability analysis to offer insights on the profitability of using catalogues and emails to reach customers. For certain firms, especially those with a history of using catalogue mailings, the findings suggest that catalogues remain relevant and are an effective tool at influencing purchases across both online and offline channels despite the increasing trend toward digital marketing. In addition, we found a segment of digital consumers respond favorably to both emails and catalogues. We argue catalogues have retained their competitive advantage over email marketing communication because the catalogue may not compete for attention with consumers' other digital distractions.     

Consumer Brand Marketing through Full- and Self-Service Channels in an Emerging Economy

A unique characteristic of emerging economies is the wide variety of dominant channel formats. We evaluate the influence of a brand's marketing mix on channel partners and consumer sales in both full and self-service channels in one emerging economy (Brazil). We use monthly stock-keeping-unit (SKU) level sales, and marketing mix data from the beverage category in southeastern Brazil spanning more than four years. In this study, we specify a panel vector autoregression framework with error decomposition to account for endogeneity between sales and marketing mix, cross-sectional heterogeneity among SKUs, seasonality, and the different aggregation of marketing mix elements across the channels. The results show that structural differences in these channels cause differences in the responses to some of the manufacturers' marketing mix elements. Package size variety, price and merchandising have a greater long-term effect on sales in self-service than in full-service channels. Brands' channel relationship programs support price increases in self-service channels without a corresponding decrease in sales. Distribution gains are important in both channels. In the full-service channel, package size variety has the highest long-term effect among all of the modeled marketing mix elements. Our study highlights that marketing mix strategies popular in the self-service dominant channels of the developed economies are not as effective in the full-service formats that remain important in emerging economies.