Combining Choices and Response Times in the Field: A Drift-Diffusion Model of Mobile Advertisements

37 Pages Posted: 19 Dec 2018 Last revised: 12 Jun 2019

See all articles by Khai Chiong

Khai Chiong

University of Texas at Dallas - Naveen Jindal School of Management

Matthew Shum

California Institute of Technology

Ryan Webb

University of Toronto

Richard Chen

Happy Elements, Inc.

Date Written: January 14, 2019

Abstract

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 subjects’ 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 5 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

Chiong, Khai and Shum, Matthew and Webb, Ryan and Chen, Richard, Combining Choices and Response Times in the Field: A Drift-Diffusion Model of Mobile Advertisements (January 14, 2019). Available at SSRN: https://ssrn.com/abstract=3289386 or http://dx.doi.org/10.2139/ssrn.3289386

Khai Chiong

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

P.O. Box 830688
Richardson, TX 75083-0688
United States

Matthew Shum (Contact Author)

California Institute of Technology ( email )

Pasadena, CA 91125
United States

Ryan Webb

University of Toronto ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Richard Chen

Happy Elements, Inc. ( email )

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