Experimental Designs and Estimation for Online Display Advertising Attribution in Marketplaces

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Authors Joel Barajas, Ram Akella, Marius Holtan, Aaron Flores
Journal/Conference Name Marketing Science
Paper Category ,
Paper Abstract Online Display Advertising’s importance as a marketing channel is partially due to its ability to attribute conversions to campaigns. Current industry practice to measure ad effectiveness is to run randomized experiments using placebo ads, assuming external validity for future exposures. We identify two different effects, i.e., a strategic effect of the campaign presence in marketplaces, and a selection effect due to user targeting; these are confounded in current practices. We propose two novel randomized designs to: (1) estimate the overall campaign attribution without placebo ads, (2) disaggregate the campaign presence and ad effects. Using the Potential Outcomes Causal Model, we address the selection effect by estimating the probability of selecting influenceable users. We show the ex-ante value of continuing evaluation to enhance the user selection for ad exposure mid-flight. We analyze two performance-based (CPA) and one Cost-Per-Impression (CPM) campaigns with 20 million users each. We estimate a negative CPM campaign presence effect due to cross product spillovers. Experimental evidence suggests that CPA campaigns incentivize selection of converting users regardless of the ad, up to 96% more than CPM campaigns, thus challenging the standard practice of targeting most likely converting users.
Date of publication 2016
Code Programming Language Matlab

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