When Less Is More and More Is More: Proximity and Repetition in Online Display Retail Advertising in a Large-Scale Field Experiment on Yahoo!

• Activity Number: 448
• Type: Invited
• Date/Time: Wednesday, August 3, 2011 : 8:30 AM to 10:20 AM
• Sponsor: Section on Statistics and Marketing
• Author(s): Randall A. Lewis*+ and David H. Reiley and Garrett A. Johnson
• Companies: Yahoo Research and Yahoo Research and Northwestern University
• Keywords: field experiment ; online display advertising ; frequency ; distance ; offline sales ; advertising effectiveness

Abstract

Yahoo! Research partnered with a nationwide retailer to study the effectiveness of display advertising on online and in-store sales on more than three million shared customers. We measure the impact of higher ad impression frequency using a simple design that varies the ads that users see on the Yahoo! network within identically targeted campaigns: users in the treatment group see the retailer's ads; users in the control group see unrelated, `control' ads; and users in the half treatment group see an equal probability mixture of the retailer's and control ads. We find a statistically significant increase in sales, relative to the control group, as a result of the ads. Doubling the number of impressions per person--from 17 to 34 in a two-week period--approximately doubled the treatment effect. We also find striking evidence that the ads most strongly affected customers who live closest to the retailer's brick-and-mortar locations: those who live within two miles of a store experience six times the incremental sales lift due to ads as those living farther away.