A Samsung Ad for the iPad? Display Advertising's Competitive Spillovers to Search
35 Pages Posted: 4 Jan 2014
Date Written: January 2, 2014
We find display advertising influences customer search for both the advertised brand and its competitors. We exploit a natural experiment that randomizes ad delivery on 500 million visits to the Yahoo! homepage and compare visitors' subsequent activities on Yahoo! Search. In three advertisers' campaigns, display ads increase searches for advertised brands by 30-45% and for competitors' brands by up to 23%. Strikingly, the total number of incremental searches for competitors is 2-8 times the increase for advertisers' brands. We discuss how these spillovers can create strategic complementarities for search advertisers and reduce firms' investments in advertising.
Keywords: advertising, natural experiment, spillovers, externality, search, competition, complementarity, strategic complementarity
JEL Classification: M37, M31, D83, L86
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