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

67 Pages Posted: 28 Dec 2022 Last revised: 31 Jan 2024

Date Written: December 20, 2022

Abstract

We study how advertising content influences consumers' decisions. To this end, we create a simulated online bookstore that imitates a real online shopping experience. We then conduct a pre-registered and incentive-compatible experiment in which we randomly expose store visitors to display ads, randomizing both advertising exposures and content. We find that ad content plays a major role in shaping advertising effects. Ads that reveal a book's low price consistently increase demand for the advertised book relative to ads that do not reveal price. By contrast, ads that reveal the book's genre induce some consumers to search and buy the book but lead others to reject it without search. We show these polarized responses can increase or decrease the total number of searches and purchases of the advertised book depending on the share of consumers who favor the revealed genre. Our findings suggest that advertisers should carefully choose which product attributes to reveal in their ad copies. We also show that revealing product attributes in ads does not change the total amount of search. Taken together, our results suggest the primary role of ad content is to affect consumers' beliefs about the advertised book rather than to alter the perceived benefits from search.

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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