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Sponsored brands video rings up clicks and sales in the short and long run

Author

Listed:
  • Koen Pauwels

    (Amazon Ads)

  • Michael Peran

    (Amazon Ads)

  • Zee Shah

    (Amazon Ads)

  • German Schnaidt

    (Amazon Ads)

  • Dauwe Vercamer

    (Amazon Ads)

Abstract

Video ads are increasingly popular in digital marketing, but advertisers are unsure about how much they improve performance over static ads and which consumer response, such as unmuting or watching through the end, matters most. Using data from the online retail site Amazon.com, we apply causal inference methods to both a monthlong and yearlong time horizon and find support for our hypotheses. First, brands that invested in Sponsored Brands video (SBv) ads in addition to sponsored ads static ads had a 25% higher click-through rate (CTR) and 10% higher year-over-year sales growth. Second, individual consumer CTR depends on ad format (video vs. static), unmuting, and time watched. For audiences in 15 countries across North America, Europe, the Middle East, Asia, and Australia, we find a 17.7 times higher CTR on SBv versus static images, especially for unmuted versus muted SBv. Furthermore, the muted consumer CTR increases with the viewed video length, with a substantial increase at a viewed video length longer than 5 s. Surprisingly, the unmuted CTR remains over 3 times that of muted CTR at all viewed video lengths, showing only a CTR uptick when the video was completed. Thus, if the ad is not watched with sound for its full length (the best-case scenario), advertisers should strive for video ads that (1) are unmuted, even for a short time, or (2) play at least 5 s on mute.

Suggested Citation

  • Koen Pauwels & Michael Peran & Zee Shah & German Schnaidt & Dauwe Vercamer, 2023. "Sponsored brands video rings up clicks and sales in the short and long run," Journal of Marketing Analytics, Palgrave Macmillan, vol. 11(3), pages 275-286, September.
    • Handle: RePEc:pal:jmarka:v:11:y:2023:i:3:d:10.1057_s41270-023-00237-3
    DOI: 10.1057/s41270-023-00237-3
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    References listed on IDEAS

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    Cited by:

    1. Vivian Qin & Koen Pauwels & Bobby Zhou, 2024. "Data-driven budget allocation of retail media by ad product, funnel metric, and brand size," Journal of Marketing Analytics, Palgrave Macmillan, vol. 12(2), pages 235-249, June.

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