IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v61y2015i11p2707-2719.html
   My bibliography  Save this article

Standardization and the Effectiveness of Online Advertising

Author

Listed:
  • Avi Goldfarb

    (Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada)

  • Catherine E. Tucker

    (MIT Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142)

Abstract

The technological transformation and automation of digital content delivery has revolutionized the media industry. Increased reliance on automation has also led to requirements for standardization of content-delivery formats. This paper examines how the memorability of banner advertising changed with the introduction of new standards regularizing its format. Using data from randomized field tests, we find evidence that for most ads, ad effectiveness falls as the use of standard formats rises. The decline is smaller when a standardized ad appears to be more original (such as ads created by an ad agency). Therefore, a likely explanation is that increased use of a standard format makes it harder for basic ads to distinguish themselves from their competition because the ad format commands less attention. This paper was accepted by Pradeep Chintagunta, marketing.

Suggested Citation

  • Avi Goldfarb & Catherine E. Tucker, 2015. "Standardization and the Effectiveness of Online Advertising," Management Science, INFORMS, vol. 61(11), pages 2707-2719, November.
    • Handle: RePEc:inm:ormnsc:v:61:y:2015:i:11:p:2707-2719
    DOI: 10.1287/mnsc.2014.2016
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.2014.2016
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.2014.2016?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. Timothy Simcoe, 2012. "Standard Setting Committees: Consensus Governance for Shared Technology Platforms," American Economic Review, American Economic Association, vol. 102(1), pages 305-336, February.
    2. Joseph Farrell & Garth Saloner, 1988. "Coordination through Committees and Markets," RAND Journal of Economics, The RAND Corporation, vol. 19(2), pages 235-252, Summer.
    3. Randall Lewis & Justin M. Rao & David H. Reiley, 2015. "Measuring the Effects of Advertising: The Digital Frontier," NBER Chapters, in: Economic Analysis of the Digital Economy, pages 191-218, National Bureau of Economic Research, Inc.
    4. Anthony Dukes & Esther Gal–Or, 2003. "Negotiations and Exclusivity Contracts for Advertising," Marketing Science, INFORMS, vol. 22(2), pages 222-245, November.
    5. Marc Rysman & Timothy Simcoe, 2008. "Patents and the Performance of Voluntary Standard-Setting Organizations," Management Science, INFORMS, vol. 54(11), pages 1920-1934, November.
    6. Anne-Laure Sellier & Darren W. Dahl, 2011. "Focus! Creative Success Is Enjoyed Through Restricted Choice," Post-Print hal-00668631, HAL.
    7. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
    8. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    9. Monic Sun & Feng Zhu, 2013. "Ad Revenue and Content Commercialization: Evidence from Blogs," Management Science, INFORMS, vol. 59(10), pages 2314-2331, October.
    10. Rik Pieters & Luk Warlop & Michel Wedel, 2002. "Breaking Through the Clutter: Benefits of Advertisement Originality and Familiarity for Brand Attention and Memory," Management Science, INFORMS, vol. 48(6), pages 765-781, June.
    11. Joseph Farrell & Timothy Simcoe, 2012. "Choosing the rules for consensus standardization," RAND Journal of Economics, RAND Corporation, vol. 43(2), pages 235-252, June.
    12. Angelique Augereau & Shane Greenstein & Marc Rysman, 2006. "Coordination versus differentiation in a standards war: 56K modems," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 887-909, December.
    13. Anindya Ghose & Sha Yang, 2009. "An Empirical Analysis of Search Engine Advertising: Sponsored Search in Electronic Markets," Management Science, INFORMS, vol. 55(10), pages 1605-1622, October.
    14. Horrace, William C. & Oaxaca, Ronald L., 2006. "Results on the bias and inconsistency of ordinary least squares for the linear probability model," Economics Letters, Elsevier, vol. 90(3), pages 321-327, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shehu, Edlira & Abou Nabout, Nadia & Clement, Michel, 2021. "The risk of programmatic advertising: Effects of website quality on advertising effectiveness," International Journal of Research in Marketing, Elsevier, vol. 38(3), pages 663-677.
    2. Miroslav Mandić & Iva Gregurec & UgljeÅ¡a Vujović, 2023. "Measuring the Effectiveness of Online Sales by Conducting A/B Testing," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 35(2), pages 223-249.

    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. Justus Baron & Daniel F. Spulber, 2018. "Technology Standards and Standard Setting Organizations: Introduction to the Searle Center Database," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(3), pages 462-503, September.
    2. Wen, Wen & Forman, Chris & Jarvenpaa, Sirkka L, 2022. "The effects of technology standards on complementor innovations: Evidence from the IETF," Research Policy, Elsevier, vol. 51(6).
    3. Timothy Simcoe, 2014. "Governing the Anticommons: Institutional Design for Standard-Setting Organizations," Innovation Policy and the Economy, University of Chicago Press, vol. 14(1), pages 99-128.
    4. Timothy Simcoe & Jeremy Watson, 2019. "Forking, Fragmentation, and Splintering," Strategy Science, INFORMS, vol. 4(4), pages 283-297, December.
    5. Wen Wen & Chris Forman & Sirkka Jarvenpaa, 2014. "How Do Open Standards Influence Inventive Activity? Evidence from the IETF," Working Papers 14-20, NET Institute.
    6. Cabral, Luís & Salant, David, 2014. "Evolving technologies and standards regulation," International Journal of Industrial Organization, Elsevier, vol. 36(C), pages 48-56.
    7. Stephen L. Jones & Aija Leiponen & Gurneeta Vasudeva, 2021. "The evolution of cooperation in the face of conflict: Evidence from the innovation ecosystem for mobile telecom standards development," Strategic Management Journal, Wiley Blackwell, vol. 42(4), pages 710-740, April.
    8. Baron, Justus & Ménière, Yann & Pohlmann, Tim, 2014. "Standards, consortia, and innovation," International Journal of Industrial Organization, Elsevier, vol. 36(C), pages 22-35.
    9. Justus Baron & Jorge Contreras & Martin Husovec & Pierre Larouche, 2019. "Making the Rules: The Governance of Standard Development Organizations and their Policies on Intellectual Property Rights," JRC Research Reports JRC115004, Joint Research Centre.
    10. Pierre Larouche & Florian Schuett, 2019. "Repeated interaction in standard setting," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(3), pages 488-509, June.
    11. Gandal, Neil & Regibeau, Pierre, 2013. "SSOs: Current Policy Issues and Empirical Evidence," Foerder Institute for Economic Research Working Papers 275825, Tel-Aviv University > Foerder Institute for Economic Research.
    12. Leiponen, Aija, 2006. "Competing through cooperation: Standard setting in wireless telecommunications," Discussion Papers 1056, The Research Institute of the Finnish Economy.
    13. Wiegmann, Paul Moritz & de Vries, Henk J. & Blind, Knut, 2017. "Multi-mode standardisation: A critical review and a research agenda," Research Policy, Elsevier, vol. 46(8), pages 1370-1386.
    14. Delcamp, Henry & Leiponen, Aija, 2014. "Innovating standards through informal consortia: The case of wireless telecommunications," International Journal of Industrial Organization, Elsevier, vol. 36(C), pages 36-47.
    15. Fiedler, Clemens & Larrain, Maria & Prüfer, Jens, 2023. "Membership, governance, and lobbying in standard-setting organizations," Research Policy, Elsevier, vol. 52(6).
    16. van de Kaa, Geerten & Papachristos, George & de Bruijn, Hans, 2019. "The governance of platform development processes: A metaphor and a simulation model," Technological Forecasting and Social Change, Elsevier, vol. 138(C), pages 190-203.
    17. Fu, Xiao & Tan, Guofu & Wang, Jin, 2023. "Policy orientations and technology choices in standards wars," International Journal of Industrial Organization, Elsevier, vol. 88(C).
    18. Puay Khoon Toh & Cameron D. Miller, 2017. "Pawn to Save a Chariot, or Drawbridge Into the Fort? Firms' Disclosure During Standard Setting and Complementary Technologies Within Ecosystems," Strategic Management Journal, Wiley Blackwell, vol. 38(11), pages 2213-2236, November.
    19. Hussinger, Katrin & Schwiebacher, Franz, 2013. "The value of disclosing IPR to open standard setting organizations," ZEW Discussion Papers 13-060, ZEW - Leibniz Centre for European Economic Research.
    20. Jain, Sanjay, 2012. "Pragmatic agency in technology standards setting: The case of Ethernet," Research Policy, Elsevier, vol. 41(9), pages 1643-1654.

    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:ormnsc:v:61:y:2015:i:11:p:2707-2719. 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.