Transcript What*s advertisings content worth?

What‘s Advertising Content Worth?
Evidence From a Consumer Credit
Marketing Field Experiement
By MARIANNE BERTRAND
DEAN KARLAN
SENDHIL MULLAINATHAN
ELDAR SHAFIR
JONATHAN ZINMAN
Introduction
VS.
 The deliberative or
reasoned mode
 The peripheral or
intuitive mode
 System II
 System I
Overview
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Introduction
Experimental Design
Results
Conclusion
Introduction
• Firms spend billions of dollars each year on advertising
consumer products to influence demand.
• it’s difficult to predict ex ante the impact of ad. (Which
advertising Features have the most influence on people?)
• “advertising may be defined as the provision of
information about the availability and quality of a
commodity.” (Stigler)
Experimental Design
• Cooperation with a consumer lender (the “Lender”) who had
operated for over twenty years as one of the largest, most
profitable lenders in South Africa
• Analyze a direct mail field experiment in South Africa
implemented by a consumer lender that randomized ad.
content, loan price, and loan offer deadlines simultaneously
• Survey treatment: Mailers to 53194 former clients with
randomization advertising content
 implement 8 key features
System I Features
 Visual (largely uninformative) images tend to be processed through
intuitive cognitive systems.
 The 2. Feature displays a table with small and large information with the
corresponding problem of “choice overload”
System I/II Features
The 3. feature can be an incentive for customers because relevant information are
given(loan amount, maturity, and monthly payment)
 may induce demand by signaling that the Lender indeed has “no hidden
costs”
System II Features
 There is no evidence
that a raffle change
takeup decision which
still based on economic
factors
 Consumers can get a “gain
frame” or “loss frame”
which can affect the
decision
 The Lender was particularly confident that the language affinity treatment would
increase takeup and insisted that most eligible clients get it (Feature 7)
 The lender was sure that this treatment would not influence takeup, although
there may be models with very boundedly rational consumers (Feature 8)
System II Features
 The deadline tends to be as a more larger one which contradicts that consumers
prefers a short deadline with the assumption of procrastination.
Mail Design
Formula
• 𝑌𝑖 = 𝑓(𝑟𝑖, 𝑐𝑖 1 ,𝑐𝑖 2 ,…… 𝑐𝑖 13 , di, Xi)
Y - measure of client i’s loan demand or repayment
behavior
r - the client’s randomly assigned interest rate
c1, . . . , c13 - categorical variables which refer to the
eight different content features
di - randomly assigned deadline
Xi - randomization conditions
Results
Results
Conclusion
• Advertising content can have an important effect on
consumer choice
• The most important features: one example loan, no
suggested loan use and female photo
• Advertising content has a more persuasive impact for men
than for Woman (who don‘t get affected by advertising).
• In the end it‘s difficuilt to determine the ex-ante impact of
advertising because every person reacts differently on ad.
 psychological and context matters
• Thank you for your intention