The impact of advertising along the conversion funnel

Stephan Seiler*, Song Yao

*Corresponding author for this work

Research output: Contribution to journalArticle

5 Scopus citations

Abstract

We assemble a unique data set that combines information on supermarket feature advertising with path-tracking data on consumers’ movement within the store as well as purchase information. Using these novel data, we trace out how advertising affects consumer behavior along the path-to-purchase. We find advertising has no significant effect on the number of consumers visiting the category being advertised. The null effect is precisely estimated. At the upper bound of the confidence interval, a one-standard-deviation shift in advertising increases category traffic by only 1.3%. We do find a significant effect at the lower end of the conversion funnel. A one-standard-deviation change in advertising (evaluated at the point estimate) increases category-level sales by 10%. We further decompose the impact on sales and find the increase is driven by the same number of consumers buying a larger number of products of the same brand. We find no evidence of spillover effects of advertising between categories that are stocked in proximity of each other, nor between different products in the same category. Two mechanisms are consistent with these patterns: consumers retrieve memory of the ad only when interacting with the category or only consumers wanting to purchase the brand choose to consume the ad.

Original languageEnglish (US)
Pages (from-to)241-278
Number of pages38
JournalQuantitative Marketing and Economics
Volume15
Issue number3
DOIs
StatePublished - Sep 1 2017

Keywords

  • Advertising
  • Conversion funnel
  • Path-tracking data
  • Spillovers

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)
  • Marketing

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