Finding the Sweet Spot: Ad Targeting on Streaming Media

74 Pages Posted: 17 Dec 2019 Last revised: 6 May 2022

See all articles by Prashant Rajaram

Prashant Rajaram

Ivey Business School, Western University

Puneet Manchanda

University of Michigan, Stephen M. Ross School of Business

Eric M. Schwartz

University of Pennsylvania - Marketing Department; University of Michigan, Stephen M. Ross School of Business

Date Written: May 5, 2022

Abstract

A majority of US households view on-demand content on streaming video services and ad spending on these online platforms is growing rapidly. However, extant research on streaming media has not explored the balance between the interest of the viewer (content consumption) with the incentives of the platform (ad exposure). We characterize this interplay using two new metrics based on viewing data on a streaming media platform. The first metric, Bingeability, measures non-linear content consumption while the second metric, Ad Tolerance, measures the willingness of a viewer to view ads and to continue viewing after ad exposure. Using causal machine learning methods that combine a tree-based model with instrumental variables, we capture the impact of ad delivery on Bingeability and Ad Tolerance for individual viewers for each viewing session. The results indicate that the average “sweet spot” that balances the interest of the viewer and the platform consists of short ad breaks that are equally spaced at long intervals during a viewing session. We discuss the implications of our results for managers of streaming platforms.

Keywords: Advertising, Targeting, Streaming Media, Machine Learning, Causal Inference

JEL Classification: M31, M37, C14, C36, C61

Suggested Citation

Rajaram, Prashant and Manchanda, Puneet and Schwartz, Eric M. and Schwartz, Eric M., Finding the Sweet Spot: Ad Targeting on Streaming Media (May 5, 2022). Available at SSRN: https://ssrn.com/abstract=3496039 or http://dx.doi.org/10.2139/ssrn.3496039

Prashant Rajaram (Contact Author)

Ivey Business School, Western University ( email )

1255 Western Road
London, Ontario N6G0N1
Canada

Puneet Manchanda

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-936-2445 (Phone)
734-936-8716 (Fax)

Eric M. Schwartz

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States

HOME PAGE: http://www.ericmichaelschwartz.com

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