Advertising Spillovers in Mobile Apps: Evidence from Ad Shutoffs and Store Rankings

Using advertising campaign data from a large US-based mobile game developer, the authors study a global advertising shutoff in the context of mobile app install ads. Contrary to prior studies in search advertising, which reveal a major over-attribution problem where paid advertising takes credit for organic traffic that would have occurred otherwise, this study shows the opposite: paid ads generate positive spillovers to organic installs. Event study analysis shows that the shutoff decreased organic installs by 20-30%. Fixed-effects panel models estimated on longer-term data find that every $100 spent is associated with 32 paid installs and 2.2 organic installs, highly consistent with the event study estimates. Further analysis strongly suggests that this positive paid-to-organic spillover operates through a ranking mechanism: paid installs boost app store category rankings, thereby increasing organic visibility. Combining campaign and ranking data, the authors find that (1) ad spend has a statistically and economically significant relationship with store rankings; and (2) the relationship between organic installs and ad spend disappears once these rankings are factored in, indicating that they absorb the relationship. These findings demonstrate that mobile app install ads are more effective than paid install metrics alone indicate, implying that developers may systematically underinvest in marketing.