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Quantitative Marketing and Economics

, Volume 13, Issue 3, pp 203–247 | Cite as

Effect of temporal spacing between advertising exposures: Evidence from online field experiments

  • Navdeep S. SahniEmail author
Article

Abstract

This paper aims to understand the impact of temporal spacing between ad exposures on the likelihood of a consumer purchasing the advertised product. I create an individual-level data set with exogenous variation in ad exposure and its spacing by running online field experiments. Using this data set, I first show that (1) ads significantly increase the likelihood of the consumers purchasing from the advertiser and (2) this increase carries over to future purchase occasions. Importantly, I also find evidence for the spacing effect: the likelihood of a product’s purchase increases if it’s ads are spread apart rather than bunched together, even if spreading apart involves shifting some ads away from the purchase occasion. Accounting for the spacing effect is important to detect the effects of repeated advertising. Because the traditional models of advertising do not explain the data patterns, I build a new memory-based model of how advertising influences consumer behavior. Using a nested test, I reject the restrictions imposed by the canonical goodwill stock model (Nerlove and Arrow, Economica, 29(114):129–142, 1962), in favor of the memory-based model I propose. Additionally, I use the estimated parameters to simulate counterfactual scenarios and show that the advertisers’ profits might be lower if the features of the memory model are not accounted for.

Keywords

Advertising Search advertising Spacing effect Temporal spacing Repeated advertising ACT-R model Cognitive psychology Memory-based model Long-term effects of ads Carryover effects Goodwill model Advertising frequency Memory model Online advertising Internet advertising Randomized experiments Randomized field experiments Field experiments 

JEL Classification

M31 M37 D03 D12 D91 

Supplementary material

11129_2015_9159_MOESM1_ESM.pdf (1.3 mb)
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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Graduate School of BusinessStanford UniversityStanfordUSA

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