An Experimental Investigation of the Effects of Retargeted Advertising: The Role of Frequency and Timing
Navdeep S. Sahni, Sridhar Narayanan, Kirthi Kalyanam
Journal of Marketing Research · 2019 · Volume 56 · Issue 3
Abstract
In collaboration with an online seller of home-improvement products, the authors conduct a large-scale randomized field experiment to study the effects of retargeted advertising, a form of internet advertising in which banner ads are displayed to users after they visit the advertiser’s website. They find that switching on experimental retargeting causes 14.6% more users to return to the website within four weeks. The impact of retargeting decreases as the time since the consumer first visited the website increases—indeed, 33% of the effect of the first week’s advertising occurs on the first day. Furthermore, the authors find evidence of the existence of complementarities in advertising over time: the effect of advertising in week 2 of the campaign is higher when the user was assigned to a nonzero level of advertising in week 1. The authors discuss mechanisms that can explain their findings and demonstrate a novel low-cost method that can be applied generally to conduct valid online advertising experiments.
Keywords
retargeting, randomized field experiment, digital advertising, temporal patterns, frequency effects of advertising
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