Combining Choices and Response Times in the Field: a Drift-Diffusion Model of Mobile Advertisements
35 Pages Posted: 19 Dec 2018 Last revised: 2 May 2019
Date Written: January 14, 2019
We study how choice and response time data can be combined to estimate the effectiveness of manipulating attention to advertisements. We utilize the class of drift-diffusion models — originally developed in psychology and neuroeconomics to jointly explain sub- jects’ choices and response times in laboratory experiments — to model users’ responses to video advertisements on mobile devices. The combination of response time with choice data allows separate identification of the diffusion processes characterizing users’ preferences when the ad is playing, as well as when users face a subsequent decision to click-through on the ad.
Using our estimates, we address the counterfactual of whether users should be permit- ted to skip part or all of a video advertisement before making a choice. Overall, we find that allowing users to skip the ad after ten seconds yields roughly the same revenue as forcing them to view the entire thirty-second ad, thus rationalizing the practice of some platforms (e.g. YouTube) where users can skip an ad after 5 or 10 seconds. However, the effects are very heterogeneous across users. Ad revenue can be higher if the “skip-ability" of the ad could be targeted and individualized according to users’ demographics.
Keywords: mobile advertising, drift-diffusion model, response times, skippable ads, bounded accumulation models
JEL Classification: L81, M37, D03, D83, D87, C15, C22
Suggested Citation: Suggested Citation