Television Advertising and Online Shopping
52 Pages Posted: 8 Apr 2014 Last revised: 24 Oct 2014
Date Written: October 23, 2014
Media multitasking competes with television advertising for consumers’ attention, but it also may facilitate immediate and measurable response to some advertisements. This paper explores whether and how television advertising influences online shopping. We construct a massive dataset spanning $3.4 billion in spending by 20 brands, measures of brands’ website traffic and transactions, and ad content measures for 1,224 commercials. We use a quasi-experimental design to estimate whether and how TV advertising influences changes in online shopping within two-minute pre/post windows of time. We use non-advertising competitors’ online shopping in a difference-in-differences approach to measure the same effects in two-hour windows around the time of the ad. The findings indicate that television advertising does influence online shopping and that advertising content plays a key role. Action-focus content increases direct website traffic and sales. Product-focus and emotion-focus ad content actually reduce website traffic while simultaneously increasing purchases, with a net effect on sales that is positive for most brands. These results imply that brands seeking to attract multitaskers’ attention and dollars must select their advertising copy carefully.
Keywords: Advertising content, difference-in-differences, internet, media multitasking, online purchases, simultaneous equations model, quasi-experimental design, television
JEL Classification: M30, M31, M37
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