Tech Industry

Retail Advertising Works! Measuring The Effects Of Advertising On Sales Via A Controlled Experiment On Yahoo!

Date Added: Nov 2008
Format: PDF

A randomized experiment performed in cooperation between Yahoo! and a major retailer allows to measure the effects of online advertising on sales. The authors exploit a match of over one million customers between the databases of Yahoo! and the retailer, assigning them to treatment and control groups for an online advertising campaign for this retailer and then measuring each individual's weekly sales at this retailer, both online and in stores. By combining a controlled experiment with panel data on purchases, the authors find statistically and economically significant impacts of the advertising on sales.