Where Does Advertising Content Lead You? We Created a Bookstore to Find Out

Abstract

We study how advertising content influences consumers’ decisions. To this end, we create a simulated online bookstore that imitates a real online shopping experience. We then conduct a preregistered and incentive-compatible experiment in which we randomly expose store visitors to display ads, randomizing both advertising exposures and content. We find that ad content plays a major role in shaping advertising effects. Ads that reveal a book’s low price consistently increase demand for the advertised book relative to ads that do not reveal price. By contrast, ads that reveal the book’s genre induce some consumers to search and buy the book but lead others to reject it without search. We show these polarized responses can increase or decrease the total number of searches and purchases of the advertised book depending on the share of consumers who favor the revealed genre. Our findings suggest that advertisers should carefully choose which product attributes to reveal in their ad copies. We also show that revealing product attributes in ads does not change the total amount of search. Taken together, our results suggest the primary role of ad content is to affect consumers’ beliefs about the advertised book rather than to alter the perceived benefits from search.

History: Catherine Tucker served as the senior editor for this article.

Funding: This work was supported by Amazon Research Award. All authors certify that they have no affiliations with or involvement in an any organization or entity with any financial or non-financial interest in the subject matter or materials discussed in this manuscript.

Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mksc.2023.0138. The preregistration document is available at https://aspredicted.org/m3jm2.pdf. Our public data repository at https://github.com/ilyamorozov/adContent contains data, codes, and a written tutorial with instructions on how to create a simulated online store.