IDEAS home Printed from https://ideas.repec.org/a/aea/aerins/v7y2025i4p447-62.html

The Consumer Welfare Effects of Online Ads: Evidence from a Nine-Year Experiment

Author

Listed:
  • Erik Brynjolfsson
  • Avinash Collis
  • Daniel Deisenroth
  • Haritz Garro
  • Daley Kutzman
  • Asad Liaqat
  • Nils Wernerfelt

Abstract

Research on the effects of online advertising on consumer welfare is limited due to challenges in running large-scale field experiments. We analyze a long-running field experiment on Facebook in which a random subset of users received no ads in their newsfeeds. Using an incentive-compatible deactivation experiment, we find no significant differences in users' valuation of Facebook across a representative sample of 53,083 Facebook users in the ads and no ads groups. Our sample size allows for precise estimates, suggesting that either the disutility of ads is relatively small or that there are offsetting benefits, such as product discovery.

Suggested Citation

  • Erik Brynjolfsson & Avinash Collis & Daniel Deisenroth & Haritz Garro & Daley Kutzman & Asad Liaqat & Nils Wernerfelt, 2025. "The Consumer Welfare Effects of Online Ads: Evidence from a Nine-Year Experiment," American Economic Review: Insights, American Economic Association, vol. 7(4), pages 447-462, December.
    • Handle: RePEc:aea:aerins:v:7:y:2025:i:4:p:447-62
    DOI: 10.1257/aeri.20240452
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/aeri.20240452
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://doi.org/10.3886/E225641V1
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/materials/24230
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/materials/24231
    Download Restriction: no
    File URL: https://libkey.io/10.1257/aeri.20240452?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Beknazar-Yuzbashev, George & Jimenez-Duran, Rafael & Simonov, Andrey & Mateusz Stalinsk, Mateusz, 2026. "Social Media Advertising Loads as Prices," The Warwick Economics Research Paper Series (TWERPS) 1602, University of Warwick, Department of Economics.
    2. Beknazar-Yuzbashev, George & Jiménez-Durán, Rafael & Simonov, Andrey & Stalinski, Mateusz, 2026. "Social Media Advertising Loads as Prices," CAGE Online Working Paper Series 792, Competitive Advantage in the Global Economy (CAGE).

    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aerins:v:7:y:2025:i:4:p:447-62. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.