A Samsung Ad for the iPad? Display Advertising's Competitive Spillovers to Search

35 Pages Posted: 4 Jan 2014

See all articles by Randall A. Lewis

Randall A. Lewis

Netflix

Dan Tri Nguyen

University of Chicago - Booth School of Business

Date Written: January 2, 2014

Abstract

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

Suggested Citation

Lewis, Randall A. and Nguyen, Dan Tri, A Samsung Ad for the iPad? Display Advertising's Competitive Spillovers to Search (January 2, 2014). Available at SSRN: https://ssrn.com/abstract=2374414 or http://dx.doi.org/10.2139/ssrn.2374414

Randall A. Lewis (Contact Author)

Netflix ( email )

Los Gatos, CA
United States
312-RA-LEWIS (Phone)

HOME PAGE: http://www.econinformatics.com/

Dan Tri Nguyen

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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