The Influence of Context on Online Shopping Behavior: The Case of Concurrent TV Consumption

41 Pages Posted: 3 Feb 2018 Last revised: 21 Sep 2018

Oliver Hinz

Goethe University Frankfurt - Faculty of Economics and Business Administration

Shawndra Hill

Microsoft Research

Amit Sharma

Cornell University

Date Written: August 16, 2018

Abstract

It is widely agreed that people use digital devices while watching TV, a phenomenon called "second Screening." While previous research has shown that the diffusion of mobile devices can increase online sales, work on multitasking suggests that second screening may lead to lower sales. In this paper, we study the impact of concurrent TV viewership on online shopping behavior and try to understand the conflicting results. Our first study analyzes the impact of TV consumption on online shopping behavior at the aggregate level using a panel of 100,000 U.S. customers over a period of 24 months. We address potential endogeneity problems with an instrumental variable approach. Our second study proposes a novel approach to realizing individual-level analysis over thousands of consumers and products. We identify a sample of consumers who watched a certain TV show and analyze their Amazon shopping carts in the context of TV consumption. We then compare these results to the shopping behavior of the same sample of consumers one week before they watched the TV show. Both studies reveal that while TV consumption is correlated with a higher likelihood of online shopping in general, the causal effect of TV watching differs with respect to the complexity of the products purchased. If a TV program appeals to a large number of viewers, this results in fewer sales of high-complexity products (1% increase in TV consumption leads to -1% sales) and more sales of low-complexity products (1% increase in TV consumption leads to 6.5% sales). New insights on this effect and information about its magnitude could help marketers better allocate their TV ad spending and make better online shopping recommendations for online shoppers who concurrently consume TV.

Keywords: Online Sales, TV, Second Screening, Contextual Information, Personalization, Attention Economy, Instrumental Variable Approach

JEL Classification: M31, M15

Suggested Citation

Hinz, Oliver and Hill, Shawndra and Sharma, Amit, The Influence of Context on Online Shopping Behavior: The Case of Concurrent TV Consumption (August 16, 2018). Available at SSRN: https://ssrn.com/abstract=3107628 or http://dx.doi.org/10.2139/ssrn.3107628

Oliver Hinz (Contact Author)

Goethe University Frankfurt - Faculty of Economics and Business Administration ( email )

Mertonstrasse 17-25
Frankfurt am Main, D-60325
Germany

Shawndra Hill

Microsoft Research ( email )

New York, NY 10011
United States

Amit Sharma

Cornell University ( email )

Ithaca, NY 14853
United States

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