Where Does Advertising Content Lead You? We Created a Bookstore to Find Out

66 Pages Posted: 28 Dec 2022 Last revised: 9 Jan 2023

Date Written: December 20, 2022

Abstract

We study how advertisements with varied content influence consumers' decisions. To this end, we create a simulated online bookstore that imitates a real online shopping experience. Consumers can browse the product list, use search tools such as queries and filters, explore books by visiting product pages, and place orders just like they normally would when shopping online. We then conduct a pre-registered and incentive-compatible experiment, in which we randomly expose consumers in our store to display ads, randomizing both advertising exposures and content. Our experimental results suggest that advertising content plays a major role in shaping advertising effects. When ads do not reveal product attributes, they encourage consumers to become informed about the advertised book by making its product page more easily accessible. Revealing the book's attributes generates additional effects on search and choice. Advertising a low price unambiguously increases demand for the advertised book. By contrast, advertising the book's genre induces some consumers to search and buy the book while making others discard this option without search. Our results suggest that researchers need to explicitly account for advertising content when estimating the effects of advertising on demand or assessing the impact of advertising regulations.

Keywords: Advertising, Consumer Search, Lab Experiment

JEL Classification: C83, C91, D12, D83, L00, M37

Suggested Citation

Morozov, Ilya and Tuchman, Anna, Where Does Advertising Content Lead You? We Created a Bookstore to Find Out (December 20, 2022). Available at SSRN: https://ssrn.com/abstract=4308400 or http://dx.doi.org/10.2139/ssrn.4308400

Ilya Morozov (Contact Author)

Kellogg School of Management ( email )

Evanston, IL 60201
United States

Anna Tuchman

Northwestern - Kellogg ( email )

Kellogg School of Management
2001 Sheridan Rd.
Evanston, IL 60208
United States

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