Hoban, P. R., & Bucklin, R. E. (2015). Effects of internet display advertising in the purchase funnel:
Model-based insights from a randomized field experiment.
Reallocating a significant proportion of the ad exposures from people in early funnel stages to those
who have created an account but have not yet purchased is expected to increase site visits by +/-
10%.
Although people actively avoid looking at display ads, such ads still have a positive effect on brand
awareness and advertising recall. banner ad exposure had a positive effect on purchase frequency for
existing customers, this effect was greater when across-site browsing increased.
Banner ads have more influence on users who are browsing than on those who are performing a
goal-directed activity.
Managers try to increase ad effectiveness by targeting specific people with relevant browsing and
search histories. But it is unclear how the ad server selects which prior visitors will receive
impressions.
Targeting can negatively affect display ad effectiveness when paired with highly visible creative,
perceived as obtrusive. This effect is the strongest in private categories (e.g. finances & health).
Dynamically retargeted ads (ads that show specific products the consumer previously viewed) typically
underperform more generic ads. But this relationship is reversed when a consumer has visited an
online review site, which is interpreted as a refinement in product preferences.
Means a relationship with ad effectiveness and customers position in the purchase funnel.
Selection effect: the users exposed (vs. not exposed) to the ads may have had those ads targeted to
them on the basis of their propensity to act in certain ways.
2 selection issues that influences the effectiveness of display ads:
1. People who browse more web pages are more likely to see a given ad and may be more likely
to perform activities such as visiting a site and buying online.
2. Individual-level targeting may lead to people with higher baseline probabilities of site visits
being served more impressions
Buying funnel: nonvisitor > visitor > authenticated user > converted customer
Online display advertising has a small, positive, and significant effect for three of the four purchase
funnel stages studied.
- For nonvisitors, we find that marginal returns to more impression exposures decrease slowly,
suggesting an awareness-building role for ads at that stage.
o Display advertising also has a positive, significant impact on the probability of site
visit among nonvisitors
- For authenticated users and converted customers, the marginal effects decay much more
quickly, suggesting a reminder role of ads.
o Display advertising has a significant, positive impact on the probability of purchase
among authenticated users.
- For people who previously visited the site but declined to provide identifying information,
online display advertising has no discernible impact on behavior.
o This null effect is due to the dominant influence of product experience over
advertising effects.
Consumers response to advertising changes with familiarity
and experience.
Also the timing of ads and privacy needs has influence. Most
website visits on Sundays and Saturdays.
Model-based insights from a randomized field experiment.
Reallocating a significant proportion of the ad exposures from people in early funnel stages to those
who have created an account but have not yet purchased is expected to increase site visits by +/-
10%.
Although people actively avoid looking at display ads, such ads still have a positive effect on brand
awareness and advertising recall. banner ad exposure had a positive effect on purchase frequency for
existing customers, this effect was greater when across-site browsing increased.
Banner ads have more influence on users who are browsing than on those who are performing a
goal-directed activity.
Managers try to increase ad effectiveness by targeting specific people with relevant browsing and
search histories. But it is unclear how the ad server selects which prior visitors will receive
impressions.
Targeting can negatively affect display ad effectiveness when paired with highly visible creative,
perceived as obtrusive. This effect is the strongest in private categories (e.g. finances & health).
Dynamically retargeted ads (ads that show specific products the consumer previously viewed) typically
underperform more generic ads. But this relationship is reversed when a consumer has visited an
online review site, which is interpreted as a refinement in product preferences.
Means a relationship with ad effectiveness and customers position in the purchase funnel.
Selection effect: the users exposed (vs. not exposed) to the ads may have had those ads targeted to
them on the basis of their propensity to act in certain ways.
2 selection issues that influences the effectiveness of display ads:
1. People who browse more web pages are more likely to see a given ad and may be more likely
to perform activities such as visiting a site and buying online.
2. Individual-level targeting may lead to people with higher baseline probabilities of site visits
being served more impressions
Buying funnel: nonvisitor > visitor > authenticated user > converted customer
Online display advertising has a small, positive, and significant effect for three of the four purchase
funnel stages studied.
- For nonvisitors, we find that marginal returns to more impression exposures decrease slowly,
suggesting an awareness-building role for ads at that stage.
o Display advertising also has a positive, significant impact on the probability of site
visit among nonvisitors
- For authenticated users and converted customers, the marginal effects decay much more
quickly, suggesting a reminder role of ads.
o Display advertising has a significant, positive impact on the probability of purchase
among authenticated users.
- For people who previously visited the site but declined to provide identifying information,
online display advertising has no discernible impact on behavior.
o This null effect is due to the dominant influence of product experience over
advertising effects.
Consumers response to advertising changes with familiarity
and experience.
Also the timing of ads and privacy needs has influence. Most
website visits on Sundays and Saturdays.
