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Online Display Advertising: Targeting and Obtrusiveness

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Author Info

  • Avi Goldfarb

    ()
    (Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada)

  • Catherine Tucker

    ()
    (MIT Sloan School of Management, Cambridge, Massachusetts 02142)

Abstract

We use data from a large-scale field experiment to explore what influences the effectiveness of online advertising. We find that matching an ad to website content and increasing an ad's obtrusiveness independently increase purchase intent. However, in combination, these two strategies are ineffective. Ads that match both website content and are obtrusive do worse at increasing purchase intent than ads that do only one or the other. This failure appears to be related to privacy concerns: the negative effect of combining targeting with obtrusiveness is strongest for people who refuse to give their income and for categories where privacy matters most. Our results suggest a possible explanation for the growing bifurcation in Internet advertising between highly targeted plain text ads and more visually striking but less targeted ads.

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File URL: http://dx.doi.org/10.1287/mksc.1100.0583
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Bibliographic Info

Article provided by INFORMS in its journal Marketing Science.

Volume (Year): 30 (2011)
Issue (Month): 3 (05-06)
Pages: 389-404

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Handle: RePEc:inm:ormksc:v:30:y:2011:i:3:p:389-404

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Related research

Keywords: e-commerce; privacy; advertising; targeting;

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Citations

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Cited by:
  1. Alexandre de Cornière & Romain De Nijs, 2013. "Online Advertising and Privacy," Economics Series Working Papers 650, University of Oxford, Department of Economics.
  2. Tucker, Catherine E., 2012. "The economics of advertising and privacy," International Journal of Industrial Organization, Elsevier, vol. 30(3), pages 326-329.
  3. Tatiana Komarova & Denis Nekipelov & Evgeny Yakovlev, 2011. "Identification, data combination and the risk of disclosure," CeMMAP working papers CWP38/11, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  4. Argenton, C. & Prüfer, J., 2011. "Search Engine Competition with Network Externalities," Discussion Paper 2011-024, Tilburg University, Tilburg Law and Economic Center.
  5. Randall Lewis & Justin M. Rao & David H. Reiley, 2013. "Measuring the Effects of Advertising: The Digital Frontier," NBER Working Papers 19520, National Bureau of Economic Research, Inc.
  6. Edelman, Benjamin & Gilchrist, Duncan S., 2012. "Advertising disclosures: Measuring labeling alternatives in internet search engines," Information Economics and Policy, Elsevier, vol. 24(1), pages 75-89.
  7. Catherine Tucker, 2011. "Virality, Network Effects and Advertising Effectiveness," Working Papers 11-06, NET Institute.
  8. Avi Goldfarb & Catherine Tucker, 2011. "Privacy and Innovation," NBER Working Papers 17124, National Bureau of Economic Research, Inc.
  9. Avi Goldfarb, 2014. "What is Different About Online Advertising?," Review of Industrial Organization, Springer, vol. 44(2), pages 115-129, March.
  10. Jenny Doorn & Janny Hoekstra, 2013. "Customization of online advertising: The role of intrusiveness," Marketing Letters, Springer, vol. 24(4), pages 339-351, December.

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