Measuring Asymmetric Persistence and Interaction Effects of Media Exposures Across Platforms

Posted: 20 Oct 2013  

Bryan K. Bollinger

Duke University - Fuqua School of Business

Michael Andrew Cohen

New York University (NYU) - Department of Marketing

Jiang Lai

University of British Columbia (UBC) - Division of Marketing

Date Written: October 11, 2013

Abstract

In this paper, we explicitly model and estimate the effect of paid, owned and earned media exposures, including television, online banner ad, and Facebook exposures, on purchase behavior at the household level. We use an advertising goodwill model, allowing for asymmetric decay rates for channel-specific goodwill stocks, and incorporate two levels of interactions. First, we include interaction effects between these goodwill stocks in the consumer utility function. Second, we allow for interactions in exposures across channels in the goodwill production functions. We use hierarchical Bayesian methods to estimate the model, incorporating channel-specific models of exposures to control for endogeneity due to firms’ ability to set aggregate levels of advertising as a function of expected demand, as well as their ability to target specific types of consumers. Our single source data allow us to assess both the short-term and long-term marginal contributions of paid, owned and earned media on sales at the consumer level; we find no meaningful interactions in the consumer utility function, but we do find a positive interaction between TV and online exposures in the creation of goodwill. On average, Facebook exposures have an insignificant effect on purchases although there is considerable heterogeneity in its effect.

Suggested Citation

Bollinger, Bryan K. and Cohen, Michael Andrew and Lai, Jiang, Measuring Asymmetric Persistence and Interaction Effects of Media Exposures Across Platforms (October 11, 2013). Available at SSRN: https://ssrn.com/abstract=2342349 or http://dx.doi.org/10.2139/ssrn.2342349

Bryan K. Bollinger (Contact Author)

Duke University - Fuqua School of Business ( email )

United States
9196607766 (Phone)

HOME PAGE: http://bryanbollinger.com

Michael Andrew Cohen

New York University (NYU) - Department of Marketing ( email )

Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States

Jiang Lai

University of British Columbia (UBC) - Division of Marketing ( email )

Canada

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