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What's Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment

Author

Listed:
  • Marianne Bertrand

    (University of Chicago Graduate School of Business and Jameel Poverty Action Lab)

  • Sendhil Mullainathan

    (University of Chicago Graduate School of Business and Jameel Poverty Action Lab)

  • Dean Karlan

    () (Economic Growth Center, Yale University)

  • Eldar Shafir

    (Princeton University, Innovations for Poverty Action, University of Chicago Graduate School of Business and Jameel Poverty Action Lab)

  • Jonathan Zinman

    (Dartmouth College and Innovations for Poverty Action)

Abstract

Firms spend billions of dollars each year advertising consumer products in order to influence demand. Much of these outlays are on the creative design of advertising content. Creative content often uses nuances of presentation and framing that have large effects on consumer decision making in laboratory studies. But there is little field evidence on the effect of advertising content as it compares in magnitude to the effect of price. We analyze a direct mail field experiment in South Africa implemented by a consumer lender that randomized creative content and loan price simultaneously. We find that content has significant effects on demand. There is also some evidence that the magnitude of content sensitivity is large relative to price sensitivity. However, it was difficult to predict which particular types of content would significantly impact demand. This fits with a central premise of psychology— context matters— and highlights the importance of testing the robustness of laboratory findings in the field.

Suggested Citation

  • Marianne Bertrand & Sendhil Mullainathan & Dean Karlan & Eldar Shafir & Jonathan Zinman, 2009. "What's Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment," Working Papers 968, Economic Growth Center, Yale University.
  • Handle: RePEc:egc:wpaper:968
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    File URL: http://www.econ.yale.edu/growth_pdf/cdp968.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    economics of advertising; economics & psychology; behavioral; economics; cues; microfinance;

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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