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

Consumer search: What can we learn from pre-purchase data?

“…In the online context, the findings are mixed with Sahni (2016) and Liang et al (2019) documenting spillover effects between similar products, while Fong (2017) shows that targeted ads lead to more searches of the advertised product at the expense of searches for non-advertised similar products in the case of an online wine retailer. Morozov and Tuchman (2023) also find no evidence of advertising spillovers to similar products in an online bookstore.…”

“…Similar to the other marketing variables described above, endogeneity concerns also arise in the case of advertising. Theses concerns have been addressed by using random variation in advertising (e.g., Morozov and Tuchman 2023), by using quasi-experimental approaches in a reduced-way approach (e.g., Tsai and Honka 2021), or by using a control function approach inside a structural search model that exploits variation in arguably exogenous variables that impact advertising (e.g., Honka et al 2017). Honka et al (2017) quantify the effects of advertising along the purchase funnel for savings accounts.…”

“…14 They find that advertising increases awareness, but has no significant effects on searches conditional on awareness, suggesting that advertising primarily affects the awareness stage of the purchase funnel. Morozov and Tuchman (2023) set up an online e-book store to run field experiments and find that advertising affects both search and purchase decisions with the effect on searches being larger. In the context of feature advertising for a supermarket, Seiler and Yao (2017) show that advertising leads to higher sales, but does not increase traffic to the advertised category.…”

“…Tsai and Honka (2021) show that informational advertising increases aided awareness, while non-informational advertising increases unaided awareness in the car insurance market. Morozov and Tuchman (2023) analyze three types of ad content for ebooks: plain ads with no information, ads with information about a horizontal characteristic (book genre) and ads with information about a vertical characteristic (price). The authors find that price advertising increases search among all consumers.…”