Default options exert an influence in areas as varied as retirement program design, organ donation policy, and consumer choice. Past research has offered potential reasons why no-action defaults matter: (a) effort, (b) implied endorsement, and (c) reference dependence. The first two of these explanations have been experimentally demonstrated, but the latter has received far less attention. In three experiments we produce default effects and demonstrate that reference dependence can play a major role in their effectiveness. We find that the queries formulated by defaults can produce differences in constructed preferences and further that manipulating queries can also mitigate default effects. The experimental context involves two environmentally consequential alternatives: cheap, inefficient incandescent light bulbs, and expensive, efficient compact fluorescent bulbs. Within this context we also measure the impact of each potential rationale for a default effect.

The current marketing environment is characterized by a surge in multichannel shopping and increasing choice of advertising channels. This situation requires firms to understand how advertising in one channel (e.g., online) influences sales in another channel (e.g., offline). This article studies the presence, magnitude, and carryover of these cross-channel effects for online advertising (display and search) and traditional media. The analysis considers how these advertising expenditures translate directly into sales, as well as indirectly through intermediate search advertising metrics-namely, impressions and clickthrough rate. For a high-end clothing and apparel retailer, the authors find that cross effects exist and are important and that cross-effect elasticities are almost as high as own-effect elasticities. Online display and, in particular, search advertising is more effective than traditional advertising. This result is primarily due to strong cross effects on the offline channel. Return-on-investment calculations suggest that by ignoring these cross effects, firms substantially miscalculate the effectiveness of online advertising. Notably, the authors find that traditional advertising decreases paid search click-through rates, thus reducing the net cross effect of traditional advertising.

No abstract

No abstract

No abstract