A Dynamic Model for Digital Advertising: The Effects of Creative Formats, Message Content and Targeting on Engagement
Posted: 19 May 2016 Last revised: 7 Jun 2016
Date Written: April 10, 2016
The authors study the joint effects of creative format, message content, and targeting on the performance of digital ads over time. Specifically, they present a dynamic model to measure the effects of different sized static (GIF) and animated (Flash) display ad formats; and consider whether different ad contents, related to brand or a price offer, are more or less effective for different ad formats and targeted or re-targeted consumers. To this end, they obtain daily impressions, clicks, targeting, and ad creative content data for a six-month period, from a major US retailer; and develop a dynamic zero-inflated (DZI) count model. Given the sparse, nonlinear, and non-Gaussian nature of the data, the study designs a particle filter/MCMC scheme for estimation. Results show that carryover rates for dynamic formats are greater than for static formats; yet static format can still be effective for price ads and re-targeting. Most interesting, results also show that re-targeted ads are effective only if they offer price incentives. The study then considers the import of these results for the retailer’s media schedules.
Keywords: Online Advertising, Ad Formats (Static versus Animated), Ad Content, Media Planner, Dynamic Zero-Inflated Poisson (DZIP), Particle Filtering/Smoothing, Sequential Monte Carlo (SMC), Markov Chain Monte Carlo
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