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Activity Number: 221 - Statistics in Marketing and Advertising: Saying it with Integrity, Accuracy, and Impact
Type: Invited
Date/Time: Monday, July 29, 2019 : 2:00 PM to 3:50 PM
Sponsor: Section on Statistics in Marketing
Abstract #300505
Title: Measuring the Causal Effects of Digital Advertising
Author(s): Ziggy Lin*
Companies: Facebook
Keywords: RCT; Experiment ; Marketing; Causal

Measuring the causal effects of digital advertising remains challenging despite the availability of granular data. Unobservable factors make exposure endogenous, and advertising’s effect on outcomes tends to be small. In principle, these concerns could be addressed using randomized controlled trials (RCTs). In practice, few online ad campaigns rely on RCTs, and instead use observational methods to estimate ad effects. Access whether the variation in data typically available in the advertising industry enables observational methods to recover the causal effects of online advertising. Using data from 15 US advertising experiments at Facebook comprising 500 million user-experiment observations and 1.6 billion ad impressions, we contrast the experimental results to those obtained from multiple observational models. The observational methods often fail to produce the same effects as the randomized experiments, even after conditioning on extensive demographic and behavioral variables. Commonly used observational approaches based on the data usually available in the industry often fail to accurately measure the true effect of advertising.

Authors who are presenting talks have a * after their name.

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