IDEAS home Printed from https://ideas.repec.org/a/inm/ormksc/v43y2024i5p986-1001.html
   My bibliography  Save this article

Where Does Advertising Content Lead You? We Created a Bookstore to Find Out

Author

Listed:
  • Ilya Morozov

    (Northwestern University, Evanston, Illinois 60208)

  • Anna Tuchman

    (Northwestern University, Evanston, Illinois 60208)

Abstract

We study how advertising content influences consumers’ decisions. To this end, we create a simulated online bookstore that imitates a real online shopping experience. We then conduct a preregistered and incentive-compatible experiment in which we randomly expose store visitors to display ads, randomizing both advertising exposures and content. We find that ad content plays a major role in shaping advertising effects. Ads that reveal a book’s low price consistently increase demand for the advertised book relative to ads that do not reveal price. By contrast, ads that reveal the book’s genre induce some consumers to search and buy the book but lead others to reject it without search. We show these polarized responses can increase or decrease the total number of searches and purchases of the advertised book depending on the share of consumers who favor the revealed genre. Our findings suggest that advertisers should carefully choose which product attributes to reveal in their ad copies. We also show that revealing product attributes in ads does not change the total amount of search. Taken together, our results suggest the primary role of ad content is to affect consumers’ beliefs about the advertised book rather than to alter the perceived benefits from search. History: Catherine Tucker served as the senior editor for this article. Funding: This work was supported by Amazon Research Award. All authors certify that they have no affiliations with or involvement in an any organization or entity with any financial or non-financial interest in the subject matter or materials discussed in this manuscript. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mksc.2023.0138 . The preregistration document is available at https://aspredicted.org/m3jm2.pdf. Our public data repository at https://github.com/ilyamorozov/adContent contains data, codes, and a written tutorial with instructions on how to create a simulated online store.

Suggested Citation

  • Ilya Morozov & Anna Tuchman, 2024. "Where Does Advertising Content Lead You? We Created a Bookstore to Find Out," Marketing Science, INFORMS, vol. 43(5), pages 986-1001, September.
    • Handle: RePEc:inm:ormksc:v:43:y:2024:i:5:p:986-1001
    DOI: 10.1287/mksc.2023.0138
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mksc.2023.0138
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mksc.2023.0138?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lesley Chiou & Catherine E. Tucker, 2022. "How Do Restrictions on Advertising Affect Consumer Search?," Management Science, INFORMS, vol. 68(2), pages 866-882, February.
    2. Stephan Seiler & Song Yao, 2017. "The impact of advertising along the conversion funnel," Quantitative Marketing and Economics (QME), Springer, vol. 15(3), pages 241-278, September.
    3. MacKenzie, Scott B, 1986. "The Role of Attention in Mediating the Effect of Advertising on Attribute Importance," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 13(2), pages 174-195, September.
    4. Gene M. Grossman & Carl Shapiro, 1984. "Informative Advertising with Differentiated Products," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(1), pages 63-81.
    5. Marianne Bertrand & Dean Karlin & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2005. "What's Psychology Worth? A Field Experiment in the Consumer Credit Market," NBER Working Papers 11892, National Bureau of Economic Research, Inc.
    6. Simon P. Anderson & Federico Ciliberto & Jura Liaukonyte & Régis Renault, 2016. "Push-me pull-you: comparative advertising in the OTC analgesics industry," RAND Journal of Economics, RAND Corporation, vol. 47(4), pages 1029-1056, November.
    7. Janssen, Maarten C.W. & Non, Marielle C., 2008. "Advertising and consumer search in a duopoly model," International Journal of Industrial Organization, Elsevier, vol. 26(1), pages 354-371, January.
    8. Zhou, Jidong, 2009. "Prominence and Consumer Search: The Case With Multiple Prominent Firms," MPRA Paper 12554, University Library of Munich, Germany.
    9. Xavier Gabaix & David Laibson & Guillermo Moloche & Stephen Weinberg, 2006. "Costly Information Acquisition: Experimental Analysis of a Boundedly Rational Model," American Economic Review, American Economic Association, vol. 96(4), pages 1043-1068, September.
    10. Mark Armstrong & John Vickers & Jidong Zhou, 2009. "Prominence and consumer search," RAND Journal of Economics, RAND Corporation, vol. 40(2), pages 209-233, June.
    11. Meurer, Michael & Stahl, Dale II, 1994. "Informative advertising and product match," International Journal of Industrial Organization, Elsevier, vol. 12(1), pages 1-19, March.
    12. Milgrom, Paul & Roberts, John, 1986. "Price and Advertising Signals of Product Quality," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 796-821, August.
    13. K. Sudhir & Subroto Roy & Mathew Cherian, 2016. "Do Sympathy Biases Induce Charitable Giving? The Effects of Advertising Content," Marketing Science, INFORMS, vol. 35(6), pages 849-869, November.
    14. Dokyun Lee & Kartik Hosanagar & Harikesh S. Nair, 2018. "Advertising Content and Consumer Engagement on Social Media: Evidence from Facebook," Management Science, INFORMS, vol. 64(11), pages 5105-5131, November.
    15. Jura Liaukonyte & Thales Teixeira & Kenneth C. Wilbur, 2015. "Television Advertising and Online Shopping," Marketing Science, INFORMS, vol. 34(3), pages 311-330, May.
    16. Olivier Gossner & Jakub Steiner & Colin Stewart, 2021. "Attention Please!," Econometrica, Econometric Society, vol. 89(4), pages 1717-1751, July.
    17. Randall Lewis & Dan Nguyen, 2015. "Display advertising’s competitive spillovers to consumer search," Quantitative Marketing and Economics (QME), Springer, vol. 13(2), pages 93-115, June.
    18. Nathan M. Fong, 2017. "How Targeting Affects Customer Search: A Field Experiment," Management Science, INFORMS, vol. 63(7), pages 2353-2364, July.
    19. K. Sudhir & Subroto Roy & Mathew Cherian, 2014. "Do Sympathy Biases Induce Charitable Giving" The Effects of Advertising Content," Cowles Foundation Discussion Papers 1940, Cowles Foundation for Research in Economics, Yale University, revised Jan 2016.
    20. Rafael P. Greminger, 2019. "Optimal Search and Discovery," Papers 1911.07773, arXiv.org, revised Feb 2022.
    21. Guido W. Imbens, 2010. "Better LATE Than Nothing: Some Comments on Deaton (2009) and Heckman and Urzua (2009)," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 399-423, June.
    22. Justin P. Johnson & David P. Myatt, 2006. "On the Simple Economics of Advertising, Marketing, and Product Design," American Economic Review, American Economic Association, vol. 96(3), pages 756-784, June.
    23. Yi-Lin Tsai & Elisabeth Honka, 2021. "Informational and Noninformational Advertising Content," Marketing Science, INFORMS, vol. 40(6), pages 1030-1058, November.
    24. Bharat N. Anand & Ron Shachar, 2011. "Advertising, the matchmaker," RAND Journal of Economics, RAND Corporation, vol. 42(2), pages 205-245, June.
    25. Miriam Bruhn & David McKenzie, 2009. "In Pursuit of Balance: Randomization in Practice in Development Field Experiments," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 200-232, October.
    26. Bradley T. Shapiro, 2018. "Positive Spillovers and Free Riding in Advertising of Prescription Pharmaceuticals: The Case of Antidepressants," Journal of Political Economy, University of Chicago Press, vol. 126(1), pages 381-437.
    27. Nils Wernerfelt & Anna Tuchman & Bradley Shapiro & Robert Moakler, 2024. "Estimating the Value of Offsite Tracking Data to Advertisers: Evidence from Meta," NBER Working Papers 32765, National Bureau of Economic Research, Inc.
    28. Marianne Bertrand & Dean Karlan & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2010. "What's Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 263-306.
    29. Ivan Guitart & Stefan Stremersch, 2021. "The impact of informational and emotional television ad content on online search and sales," Post-Print hal-03193729, HAL.
    30. Anil Kaul & Dick R. Wittink, 1995. "Empirical Generalizations About the Impact of Advertising on Price Sensitivity and Price," Marketing Science, INFORMS, vol. 14(3_supplem), pages 151-160.
    31. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-754, July/Aug..
    32. Rafael P. Greminger, 2022. "Optimal Search and Discovery," Management Science, INFORMS, vol. 68(5), pages 3904-3924, May.
    33. Elisabeth Honka & Ali Hortaçsu & Maria Ana Vitorino, 2017. "Advertising, consumer awareness, and choice: evidence from the U.S. banking industry," RAND Journal of Economics, RAND Corporation, vol. 48(3), pages 611-646, August.
    34. Linli Xu & Kenneth C. Wilbur & S. Siddarth & Jorge M. Silva-Risso, 2014. "Price Advertising by Manufacturers and Dealers," Management Science, INFORMS, vol. 60(11), pages 2816-2834, November.
    35. Charles Hodgson & Gregory Lewis, 2023. "You Can Lead a Horse to Water: Spatial Learning and Path Dependence in Consumer Search," NBER Working Papers 31697, National Bureau of Economic Research, Inc.
    36. Ackerberg, Daniel A, 2001. "Empirically Distinguishing Informative and Prestige Effects of Advertising," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 316-333, Summer.
    37. Robert, Jacques & Stahl, Dale O, II, 1993. "Informative Price Advertising in a Sequential Search Model," Econometrica, Econometric Society, vol. 61(3), pages 657-686, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yi-Lin Tsai & Elisabeth Honka, 2021. "Informational and Noninformational Advertising Content," Marketing Science, INFORMS, vol. 40(6), pages 1030-1058, November.
    2. Soberman, David A. & Xiang, Yi, 2022. "Designing the content of advertising in a differentiated market," International Journal of Research in Marketing, Elsevier, vol. 39(1), pages 190-211.
    3. Brett R Gordon & Kinshuk Jerath & Zsolt Katona & Sridhar Narayanan & Jiwoong Shin & Kenneth C Wilbur, 2019. "Inefficiencies in Digital Advertising Markets," Papers 1912.09012, arXiv.org, revised Feb 2020.
    4. Régis Chenavaz & Sajjad M. Jasimuddin, 2017. "An analytical model of the relationship between product quality and advertising," Post-Print hal-01685892, HAL.
    5. Rauch, Ferdinand, 2013. "Advertising expenditure and consumer prices," International Journal of Industrial Organization, Elsevier, vol. 31(4), pages 331-341.
    6. Honka, Elisabeth & Seiler, Stephan & Ursu, Raluca, 2024. "Consumer search: What can we learn from pre-purchase data?," Journal of Retailing, Elsevier, vol. 100(1), pages 114-129.
    7. Kurt P. Munz & Minah H. Jung & Adam L. Alter, 2020. "Name Similarity Encourages Generosity: A Field Experiment in Email Personalization," Marketing Science, INFORMS, vol. 39(6), pages 1071-1091, November.
    8. Dokyun Lee & Kartik Hosanagar & Harikesh S. Nair, 2018. "Advertising Content and Consumer Engagement on Social Media: Evidence from Facebook," Management Science, INFORMS, vol. 64(11), pages 5105-5131, November.
    9. Kohei Kawaguchi & Kosuke Uetake & Yasutora Watanabe, 2021. "Designing Context-Based Marketing: Product Recommendations Under Time Pressure," Management Science, INFORMS, vol. 67(9), pages 5642-5659, September.
    10. Guofang Huang & Matthew Shum & Wei Tan, 2019. "Is pharmaceutical detailing informative? Evidence from contraindicated drug prescriptions," Quantitative Marketing and Economics (QME), Springer, vol. 17(2), pages 135-160, June.
    11. Ivan Pastine & Tuvana Pastine, 2000. "Coordination in Markets with Consumption Externalities : The Role of Advertising and Product Quality," Working Papers 0003, Department of Economics, Bilkent University.
    12. Levent Çelik, 2008. "Monopoly Provision of Tune-ins," CERGE-EI Working Papers wp362, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    13. Saur, Marc P. & Schlatterer, Markus G. & Schmitt, Stefanie Y., 2022. "Limited perception and price discrimination in a model of horizontal product differentiation," Games and Economic Behavior, Elsevier, vol. 134(C), pages 151-168.
    14. Simon P. Anderson & Régis Renault, 2006. "Advertising Content," American Economic Review, American Economic Association, vol. 96(1), pages 93-113, March.
    15. Simon P. Anderson & Régis Renault, 2013. "The Advertising Mix for a Search Good," Management Science, INFORMS, vol. 59(1), pages 69-83, April.
    16. David A. Soberman, 2004. "Research Note: Additional Learning and Implications on the Role of Informative Advertising," Management Science, INFORMS, vol. 50(12), pages 1744-1750, December.
    17. Guy Aridor & Duarte Goncalves & Daniel Kluver & Ruoyan Kong & Joseph Konstan, 2022. "The Informational Role of Online Recommendations: Evidence from a Field Experiment," Papers 2211.14219, arXiv.org, revised Dec 2024.
    18. Nils‐Henrik M. von der Fehr & Kristin Stevik, 1998. "Persuasive Advertising and Product Differentiation," Southern Economic Journal, John Wiley & Sons, vol. 65(1), pages 113-126, July.
    19. Navdeep S. Sahni & S. Christian Wheeler & Pradeep Chintagunta, 2018. "Personalization in Email Marketing: The Role of Noninformative Advertising Content," Marketing Science, INFORMS, vol. 37(2), pages 236-258, March.
    20. Brian Jonghwan Lee, 2024. "Bankruptcy Lawyers and Credit Recovery," Working Papers 24-10, Federal Reserve Bank of Philadelphia.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:43:y:2024:i:5:p:986-1001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.