The Dynamic Impact of Temporally Turning off TV Ad on Search: Evidence from the U.S. Wireless Telecom Industry

Abstract

We measure the effects of major TV advertisers’ temporary discontinuation of TV advertising on consumer keyword search over time, by leveraging a large-scale quasiexperiment in the U.S. wireless telecom industry in which the focal brand stopped its TV advertising for one randomly chosen week. The causal identification challenge of this event study, involving continuous treatment variables, lies in having appropriate control groups for eliminating unobserved confounding factors. We address this challenge by applying the generalized synthetic control estimator (GSC) to debiase interfering “treated” and “control” units when conducting counterfactual analysis. We find that the focal brand’s intervention resulted in a significant 5% reduction of its daily search volume. This effect initially occurred after two days, but once regular TV advertising was resumed, it took two weeks for search volume to return to the prior level. In addition, we find large treatment heterogeneity across topical search categories. For instance, while search traffic was more likely to be reduced (up to 30% per day) for searches that are relevant to the content of TV ads (e.g., promotion and plan), this effect wore off quickly. Lastly, we find a positive spillover effect of the intervention on the focal brand’s competitors, which, however, is usually very short-lived.

Keywords: TV advertising, keyword search, policy evaluation, synthetic control estimation, spillover effect, quasi-experiment

JEL Classification: M3, M2