Measuring the Effects of Advertising: The Digital Frontier

Randall Lewis, Justin M. Rao, David H. Reiley

Chapter in NBER book Economic Analysis of the Digital Economy (2015), Avi Goldfarb, Shane M. Greenstein, and Catherine E. Tucker, editors (p. 191 - 218)
Conference held June 6-7, 2013
Published in April 2015 by University of Chicago Press
© 2015 by the National Bureau of Economic Research

Online advertising offers unprecedented opportunities for measurement. A host of new metrics, clicks being the leading example, have become widespread in advertising science. New data and experimentation platforms open the door for firms and researchers to measure true causal effects of advertising on a variety of consumer behaviors, such as purchases. We dissect how the new metrics and methods can be used to provide insight on the returns to advertising by setting out the questions that we think can be answered by current data and methods, those that we believe will be in play within five years, and those that we believe could not be answered with arbitrarily large and detailed data. We pay close attention to the advances in computational advertising that are not only increasing the impact of advertising with algorithmic targeting, but also by shifting the focus from "who to hit" to "what do I get."

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Document Object Identifier (DOI): 10.7208/chicago/9780226206981.003.0007

This chapter first appeared as NBER working paper w19520, Measuring the Effects of Advertising: The Digital Frontier, Randall Lewis, Justin M. Rao, David H. Reiley
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