Effect of Temporal Spacing between Advertising Exposures: Evidence from Online Field Experiments

47 Pages Posted: 18 Jan 2014 Last revised: 27 Nov 2015

See all articles by Navdeep S. Sahni

Navdeep S. Sahni

Stanford Graduate School of Business

Date Written: June 1, 2015

Abstract

This paper aims to understand the impact of temporal spacing between ad exposures on the likelihood of a consumer purchasing the advertised product. I create an individual-level data set with exogenous variation in ad exposure and its spacing by running online field experiments. Using this data set, I first show that (1) ads significantly increase the likelihood of the consumers purchasing from the advertiser and (2) this increase carries over to future purchase occasions.

Importantly, I also find evidence for the spacing effect: the likelihood of a product's purchase increases if it's ads are spread apart rather than bunched together, even if spreading apart involves shifting some ads away from the purchase occasion. Accounting for the spacing effect is important to detect the effects of repeated advertising. Because the traditional models of advertising do not explain the data patterns, I build a new memory-based model of how advertising influences consumer behavior. Using a nested test, I reject the restrictions imposed by the canonical goodwill stock model (Nerlove and Arrow [1962]), in favor of the memory-based model I propose. Additionally, I use the estimated parameters to simulate counterfactual scenarios and show that the advertisers' profits might be lower if the features of the memory model are not accounted for.

Suggested Citation

Sahni, Navdeep S., Effect of Temporal Spacing between Advertising Exposures: Evidence from Online Field Experiments (June 1, 2015). Stanford University Graduate School of Business Research Paper No. 13-17. Available at SSRN: https://ssrn.com/abstract=2380375 or http://dx.doi.org/10.2139/ssrn.2380375

Navdeep S. Sahni (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
303
Abstract Views
1,609
rank
98,494
PlumX Metrics