Maximizing User Interactivity through Banner Ad Design

This research developed criteria for an online banner ad design to maximize user interactivity. The ad's design criteria were based on studies on interactivity, animation, persuasiveness of emotional and rational appeals in ads, animation, ad placement, size, and metrics. The ad was deployed and measured for effectiveness by using behavioral response metrics: click-through rates and mouse rollovers. Findings show that the ad designed according to the criteria garnered more user interaction than the other ads deployed during the same time. This has value for advertisers that need to evaluate online banner advertising design and need to make informed decisions on advertising strategy and campaigns.     

The State of Augmented Reality Advertising Around The Globe: A Multi-Cultural Content Analysis

As a new form of advertising, augmented reality (AR) advertising offers a unique opportunity to study how new technology-facilitated ad campaigns are constructed across cultures. This research analyzes the content of 117 AR ad campaign videos uploaded on YouTube, and reveals the prevalent characteristics of AR campaigns. We compared videos from individualistic countries with those from collectivistic countries. Results suggest that AR ad campaigns from more individualistic cultures tend to include product information and enable a user to control the virtual AR content, whereas AR ad campaigns from more collectivistic cultures tend to allow a user to become part of the virtual AR content without manipulating it. In closing, we discuss managerial implications for marketers and advertisers as well as opportunities for future research.     

Understanding Programmatic Creative: The Role of AI

In this article, we expand the concept of programmatic advertising to include programmatic creative as a vital component. While artificial intelligence (AI) has already automated the media buying process, the advertising creative process still requires extensive human efforts. Such discrepancy calls for AI to transform the advertising creative process. We provide a framework for understanding and investigating programmatic creative by drawing evidence from the advertising industry in China. We specifically discuss how big data and machine learning algorithms underpin programmatic advertising. We argue that AI will integrate programmatic buying and programmatic creative in the future. We also discuss the technological, regulatory, and legal challenges faced by programmatic creative. We argue that new theories and methods are needed to conduct research in this area and provide guidance for the advertising industry.     

Smart Generation System of Personalized Advertising Copy and Its Application to Advertising Practice and Research

Artificial intelligence in programmatic advertising constitutes fertile grounds for marketing communication with tremendous opportunities. Yet, despite its touted benefits, contemporary implementations of programmatic advertising do not harness self-generative technologies so much so that different consumers are exposed to identical content. Consequently, we advance a smart generation system of personalized advertising copy (SGS-PAC) that can automatically personalize advertising content to align with the needs of individual consumers. Analytical results from a user experiment involving about 80 subjects underscore that personalized advertising copies generated by SGS-PAC can bolster click rate in online advertising platforms. Findings from this study bear significant implications for the application of artificial intelligence in online advertising.     

The risk of programmatic advertising: Effects of website quality on advertising effectiveness

Programmatic advertising is prevalent in online advertising. However, it offers managers limited control over the type of website where the ad appears, resulting in brand safety issues. Aware of the risk that ads may potentially display on websites of poor quality (nonpremium websites), managers have developed strategies to reduce this risk. Due to the lack of empirical insights, these strategies are based on “gut feeling” and depend on campaign type (branding versus performance) and brand type (premium versus nonpremium). Our research addresses this void and analyzes website quality effects for premium and nonpremium brands in branding and performance campaigns. Our results show that effects, indeed, vary depending on campaign and brand type, but not in ways that managers might expect. When a branding ad appears on a nonpremium website, attitudes towards the ad and the brand deteriorate, but only for premium brands. In contrast, website quality does not affect awareness for either type of brand. When a performance ad appears on a nonpremium website, it generates fewer clicks; this effect is stronger for premium brands. Overall, these findings enrich our understanding of the consequences of programmatic advertising and highlight the crucial role of website quality dependent on campaign goal and brand type.     

Understanding programmatic TV advertising

ABSTRACT

Television is undergoing tremendous technological developments, which will enable marketers to direct commercial messages to more specific audiences at the individual and/or household level. Traditional ways of buying TV advertising are being challenged by the programmatic approach, which originated with search and display ads, and uses data and technology and real-time auctions to automate transactions between buyers and sellers. We discuss the changes to TV that enable the rise of programmatic models and propose that its future success depends on the coordination and availability of three factors, abbreviated DAD: distribution, ad inventory and data. We also elaborate on the effects of media context and how the TV program environment matters for advertising effectiveness. Finally, we discuss the future of TV advertising and related research needs.     

Empathy with influencers? The impact of the sensory advertising experience on user behavioral responses

Short-form video influencer advertising offers new opportunities for user sensory experience to promote advertising effectiveness and induce positive user responses. This unique means of influencer-generated advertising via short-form videos has not yet been investigated. This study builds on the reciprocity norm of social exchange theory to investigate relationships among ad sensory stimuli (i.e., the sensory advertising experience), the efficacy of influencer advertising (i.e., empathy and altruistic motive), and user behavioral responses (i.e., ad avoidance intention, ad engagement, and purchase intention). It also seeks to shed light on the critical role of perceived influencer effort in these relationships. An empirical study using data from TikTok (Douyin) users and results indicate that sensory advertising experience positively affects user behavioral responses through the serial mediation of empathy and altruistic motive. Additionally, perceived influencer effort is found to be a crucial moderator of the effect of sensory advertising experience on user empathy, which further influences user behavioral responses. The findings provide insight into the persuasion effect and mechanism of short-form video influencer advertising and offer suggestions for advertising campaign designers.     

Should sequels differ from original movies in pre-launch advertising schedule? Lessons from consumers' online search activity

Sequels have become a profitable strategy in the U.S. motion picture industry because of their strong name recognition. However, while the established positioning of a sequel may help insulate it from competing firms' advertising messages, its familiarity may cause moviegoers to be more easily satiated with advertising from the sequel. Therefore, this study examines how sequels differ from original concept movies in terms of their ad effectiveness. We focus our analysis on pre-launch periods, given these periods' importance in shaping the financial outcomes of motion pictures. We consider the weekly online search volume of a movie as a measure of consumer interest in it, and thus as an intermediate response to pre-launch advertising. We then develop a model that assumes ad effectiveness can decline, due to copy and repetition wearout, and increase, due to forgetting, over time. We find that copy wearout is greater for original movies, while repetition wearout and forgetting are greater for sequels. These findings suggest that sequels should allocate more in early pre-launch periods and less immediately before release, relative to originals, to maximize pre-launch consumer interest.     

Exploring the Selective Use of Ad Blockers and Testing Banner Appeals to Reduce Ad Blocking

Ad blocker proliferation threatens the revenue streams of many websites and raises fears about the viability of digital advertising as a whole. Although industry initiatives have increasingly aimed to mitigate ad blocking, surprisingly little research addresses the problem. It remains largely unknown which factors drive ad blocking or help unblocking or “whitelisting” of select websites. This article presents an exploratory survey study of 1,634 ad blocker users and uncovers the main factors driving ad blocking and conditions for unblocking select websites. The conditions suggest changes to online advertising in line with current industry initiatives, as well as opportunities for direct appeals to ad blocker users. A field experiment with 294,331 users tests whether banner appeals can reduce ad blocking. The results show that these appeals reduce ad blocking among 1% of the ad blocker users, and among frequent visitors who encounter repeated banner appeals, this percentage increases to 2%. However, repeated banners also lead to fewer website visits of users not conforming to the appeal, which suggests a trade-off between reducing ad blocking among some users and further increasing avoidance behaviors among others.     

Do Interruptions Pay off? Effects of Interruptive Ads on Consumers' Willingness to Pay

We present the results of a study designed to measure the impact of interruptive advertising on consumers' willingness to pay for products bearing the advertiser's brand. Subjects participating in a controlled experiment were exposed to ads that diverted their attention from a computer game they were testing. We measured subjects' willingness to pay for a good associated with the advertised brand. We found that the ads significantly lowered the willingness to pay for goods associated with the advertising brand. We do not find conclusive evidence that providing some level of user control over the appearance of ads mitigates the negative impact of ad interruption. Our results contribute to the research on the economic impact of advertising, and introduce a method of measuring actual (as opposed to self-reported) willingness to pay in experimental marketing research.     

How do firms make money selling digital goods online?

We review research on revenue models used by online firms who offer digital goods. Such goods are non-rival, have near zero marginal cost of production and distribution, low marginal cost of consumer search, and low transaction costs. Additionally, firms can easily observe and measure consumer behavior. We start by asking what consumers can offer in exchange for digital goods. We suggest that consumers can offer their money, personal information, or time. Firms, in turn, can generate revenue by selling digital content, brokering consumer information, or showing advertising. We discuss the firm’s trade-off in choosing between the different revenue streams, such as offering paid content or free content while relying on advertising revenues. We then turn to specific challenges firms face when choosing a revenue model based on either content, information, or advertising. Additionally, we discuss nascent revenue models that combine different revenue streams such as crowdfunding (content and information) or blogs (information and advertising). We conclude with a discussion of opportunities for future research including implications for firms’ revenue models from the increasing importance of the mobile Internet.     

Measuring and forecasting mobile game app engagement

Monetization strategies in the large and strongly growing mobile app space must go beyond traditional purchase revenue as most mobile apps are now free to download. One key marketing innovation allows mobile app publishers to monetize ongoing engagement — in-app advertising.We study ongoing user engagement with a mobile app after the initial download decision using the $40 billion mobile gaming industry as an example. Our study investigates and forecasts user engagement after the initial download aiming to help publishers to monetize their engagement via in-app advertising. We leverage a novel dataset containing user-level engagement for 193 mobile games and propose a hierarchical Poisson model on a mobile-game level. We find significant usage heterogeneity across the mobile games studied and generate forecasts publishers can use when trying to monetize engagement via pre-sold contracts.     

Modeling heterogeneous effective advertising stock using single-source data

This paper presents a nonlinear modeling of market response between advertising stock and direct utility with heterogeneous parameters using single-source data. We examine advertising threshold effects and measure the effective advertising stock at the individual consumer level. Two kinds of information, i.e., TV advertising exposure data and consumer’s purchase history data, are combined for the modeling. The former is used for constructing advertising stock over calendar time via heterogeneous carryover parameters and the latter is applied to the choice model. The Markov chain Monte Carlo (MCMC) method is applied to estimate these heterogeneous parameters. Compared to other possible nonlinear specifications, it is shown that the proposed threshold utility function model with discontinuity at the threshold performs better than other smooth market response models. The empirical results support the existence of an advertising threshold and suggest the pulsing or “on/off” policy for our datasets. In terms of the effective reach, implying the reach after suspending the ad exposure to investigate how it is damping out for a possible “on/off” advertising policy, the optimal “off” interval was measured to be quite short to support a high-frequency pulsing policy, because the carryover parameter as well as the difference of ad stock and threshold are not large enough for our datasets.      

Television ad-skipping,consumption complementarities and the consumer demand for advertising

Endogenous consumption of advertising is common. Consumers choose to change channels to avoid TV ads, click away from paid online video ads, or discard direct mail without reading advertised details. As technological advances give firms improved abilities to target individual consumers through various media, it is becoming increasingly important for models to reflect the endogenous nature of ad consumption and to consider the implications that ad choice has for firms’ targeting strategies. With this motivation, we develop an empirical model of consumer demand for advertising in which demand for ads is jointly determined with demand for the advertised products. Building on Becker and Murphy (The Quarterly Journal of Economics, 108(4), 941–964 1993)’s ideas, the model treats advertising as a good over which consumers have utility and obtains demands as the outcome of a joint utility maximization problem. Leveraging new data that links household-level TV ad-viewing with product purchases, we provide empirical evidence that is consistent with the model: ad-skipping is found to be lower when a household has purchased more of the advertised brand, and purchases are higher when more ads have been watched recently, suggesting that advertising and product consumption are jointly determined. Fitting a structural model of joint demand to the data, we evaluate consumer welfare and advertiser profitability in advertising targeting counterfactuals motivated by an “addressable” future of TV. We find that targeting on the predicted ad-skip probability is an attractive strategy, as it indirectly selects consumers that value the product. Reflecting the positive view of advertising in the model, we also find that net consumer welfare may increase in several targeting scenarios. This occurs because under improved targeting, firms shift advertising to those who are likely to value it. At the same time, consumers that do not value the ads end up skipping them, mitigating possible welfare losses. Both forces are relevant to assessing advertising effects in a world with improved targeting and ad-skipping technology.     

Going Native: Effects of Disclosure Position and Language on the Recognition and Evaluation of Online Native Advertising

Despite recent industry attention, questions remain about how native advertising is perceived and processed by consumers. Two experiments examined effects of language and positioning in native advertising disclosures on recognition of the content as advertising, effects of recognition on brand and publisher evaluations, and whether disclosure position affects visual attention. Findings show that middle or bottom positioning and wording using “advertising” or “sponsored” increased advertising recognition compared to other conditions, and ad recognition generally led to more negative evaluations. Visual attention mediated the relationship between disclosure position and advertising recognition. Theoretical, practical, and regulatory implications for disclosures in native advertising are discussed.     

Tracking Fraudulent and Low-Quality Display Impressions

Display advertising is traded in a complex market with multiple sides and intermediaries, where advertisers are exposed to several forms of potentially fraudulent behavior. Intermediaries often claim to implement measures to detect fraud but provide limited information about those measures. Advertisers are required to trust that self-regulation efforts effectively filter out low-quality ad impressions. In this article, we propose an approach for tracking key display impression metrics by embedding a light JavaScript code in the ad to collect the necessary information to help detect fraudulent activities. We explain these metrics using the campaign cost per thousand (CPT) and the number of impressions per publisher. We test the approach through six display ad campaigns. Our results provide a counterargument against the industry claim that it is effectively filtering out display fraud and show the utility of our approach for advertisers.     

Effects of ironic advertising on consumers’ attention,involvement and attitude

The use of an ironic message in advertising has increased, but little empirical research has been conducted to identify the effects of ironic advertising on consumers. This study demonstrated that ironic advertising can lead to consumers’ higher attention to the ad and greater involvement in the ad message compared to non-ironic advertising, applying schema incongruity theory. This study also examines whether ironic advertising influences consumers’ attitudes toward the ad and the brand. Lastly, this study identified a moderating role of need for cognition on ad attention.     

The Effects of Comparative Advertising on Young Consumers’ Perceptions: Cross-Cultural Comparison Between the United States and Taiwan

This study aims to examine the effectiveness of comparative advertising of a high involvement product in two countries, the United States and Taiwan. The results show that different types of comparative advertising moderate the relationship in the proposed model and exert different levels of influences on consumers. The United States and Taiwanese consumers are significantly different in attitudes toward the ad, attitudes toward the sponsored brand, and purchase intention. The results show that direct comparative advertising might be suitable for promoting a new brand in countries with individualistic cultures. However, global marketers should be cautious when employing comparative advertising formats in collectivist cultures.     

An investigation of the influence of cinema environment on advertising effectiveness

Many advertisers are looking to cinema advertising as a nontraditional medium to reach consumers. Although several scholars have examined the effectiveness of this advertising vehicle, there is a dearth of empirically grounded research on how to improve such effectiveness. This study, based on the reactance and the equity theories, is probably the first academic project investigating how to manipulate an advertising environment in a real movie theatre to maximize advertising effectiveness. Results indicated that audiences in a distractive environment held a more positive attitude toward cinema advertising in general, but those in a restrictive environment were more likely to remember the advertised brands. In addition, the provision of ticket price information improved audiences’ acceptance of cinema advertising, but did not enhance recall. Moreover, the influence of ambient scent emitted into the atmosphere in a cinema room on ad recall dissipated when movie viewers became accustomed to such stimuli. Based on these findings, theoretical discussions and recommendations for practising managers were made.     

Attracting Comments: Digital Engagement Metrics on Facebook and Financial Performance

Many companies are now using social media such as Facebook for advertising and marketing purposes. To understand how using social media affects a company's business performance from a digital engagement perspective, this study examines how user comments on company Facebook posts influence company revenue. S&P 500 companies' revenue information in a five-year time span (from 2010 to 2015) is collected, and this information is matched to more than 24 million user comments directed at these companies' Facebook posts. The hypotheses are tested using static (fixed effects [FE] and random effects [RE]) as well as dynamic (generalized method of moments [GMM]) panel data analyses in econometric methods. The estimation results indicate that digital engagement volume, defined as the total number of Facebook comments a company received, has a significant and positive effect on revenue. In addition, digital engagement valence, defined as the average tone of Facebook comments directed toward a company, also has a significant and positive effect on revenue. Implications and directions for future research are discussed.