An Experimental Investigation of the Effects of Retargeted Advertising: The Role of Frequency and Timing

In collaboration with an online seller of home-improvement products, the authors conduct a large-scale randomized field experiment to study the effects of retargeted advertising, a form of internet advertising in which banner ads are displayed to users after they visit the advertiser's website....

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Bibliographic Details
Published in:Journal of marketing research 2019-06, Vol.56 (3), p.401-418
Main Authors: Sahni, Navdeep S., Narayanan, Sridhar, Kalyanam, Kirthi
Format: Article
Language:English
Subjects:
Advertising
Electronic commerce
Online advertising
Studies
Target markets
Websites
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Summary:In collaboration with an online seller of home-improvement products, the authors conduct a large-scale randomized field experiment to study the effects of retargeted advertising, a form of internet advertising in which banner ads are displayed to users after they visit the advertiser's website. They find that switching on experimental retargeting causes 14.6% more users to return to the website within four weeks. The impact of retargeting decreases as the time since the consumer first visited the website increases—indeed, 33% of the effect of the first week's advertising occurs on the first day. Furthermore, the authors find evidence of the existence of complementarities in advertising over time: the effect of advertising in week 2 of the campaign is higher when the user was assigned to a nonzero level of advertising in week 1. The authors discuss mechanisms that can explain their findings and demonstrate a novel low-cost method that can be applied generally to conduct valid online advertising experiments.
ISSN:0022-2437
1547-7193
DOI:10.1177/0022243718813987