What's Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment
University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)
Dean S. Karlan
Yale University; Innovations for Poverty Action; Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)
Harvard University - Department of Economics; National Bureau of Economic Research (NBER)
Dartmouth College; Innovations for Poverty Action; Jameel Poverty Action Lab; National Bureau of Economic Research (NBER)
January 23, 2009
Yale University Economic Growth Center Discussion Paper No. 968
Yale Economics Department Working Paper No. 58
Firms spend billions of dollars each year advertising consumer products in order to influence demand. Much of these outlays are on the creative design of advertising content. Creative content often uses nuances of presentation and framing that have large effects on consumer decision making in laboratory studies. But there is little field evidence on the effect of advertising content as it compares in magnitude to the effect of price. We analyze a direct mail field experiment in South Africa implemented by a consumer lender that randomized creative content and loan price simultaneously. We find that content has significant effects on demand. There is also some evidence that the magnitude of content sensitivity is large relative to price sensitivity. However, it was difficult to predict which particular types of content would significantly impact demand. This fits with a central premise of psychology - context matters - and highlights the importance of testing the robustness of laboratory findings in the field.
Number of Pages in PDF File: 35
Keywords: economics of advertising, economics & psychology, behavioral economics, cues, microfinance
JEL Classification: D01, M31, M37, C93, D12, D14, D21, D81, D91, O12
Date posted: January 24, 2009
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