A Dynamic Model for Digital Advertising: The Effects of Creative Formats, Message Content and Targeting on Engagement

JMR, Forthcoming

Posted: 19 May 2016 Last revised: 7 Jun 2016

See all articles by Norris Bruce

Norris Bruce

University of Texas at Dallas

B. P. S. Murthi

University of Texas at Dallas - Department of Marketing

Ram C. Rao

The University of Texas at Dallas, Naveen Jindal School of Management

Date Written: April 10, 2016

Abstract

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

Suggested Citation

Bruce, Norris and Murthi, B. P. S. and Rao, Ram C., A Dynamic Model for Digital Advertising: The Effects of Creative Formats, Message Content and Targeting on Engagement (April 10, 2016). JMR, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2777698 or http://dx.doi.org/10.2139/ssrn.2777698

Norris Bruce

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

B. P. S. Murthi

University of Texas at Dallas - Department of Marketing ( email )

Dallas, TX
United States
972-883-6355 (Phone)
972-883-2799 (Fax)

Ram C. Rao (Contact Author)

The University of Texas at Dallas, Naveen Jindal School of Management ( email )

Dallas, TX
United States
972-883-2580 (Phone)
972-883-6727 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
889
PlumX Metrics