“You Will:” A Macroeconomic Analysis of Digital Advertising

Dare Obasanjo (@carnage4life@mas.to)

The decline of the advertising supported internet is inevitable yet sad. Tech has been unique in being an equalizer. A poor Nigerian kid, a techie in the US or Jeff Bezos all used the same apps and websites. Now many charge $5-$15 per month creating a huge financial divide. Online advertising is a progressive form of taxation as the rich, mostly US-based consumers who buy goods & services from ads subsidized the internet for everyone else. We now live in the flat tax version of the internet.

What's Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment^*

Abstract. Firms spend billions of dollars developing advertising content, yet there is little field evidence on how much or how it affects demand. We analy

Digital Omnibus: What Would it Mean for Competition and Privacy in Advertising? - The Platform Law Blog

In November 2025, the European Commission (“Commission”) proposed a “Digital Omnibus” regulation to amend several EU legislations.[1] Although presented as a simplification exercise to strengthen Europe’s competitiveness, the proposal revisits key provisions of the General Data Protection Regulation (GDPR) and the e-Privacy-Directive concerning the use of personal data, including for advertising purposes. The changes could […]

Advertising as a Reminder: Evidence from the Dutch State Lottery

We show that advertising can act as a reminder for consumers who intend to buy a product. , Consumers who intend to buy a product may forget to do so because they suffer from limited attention. Therefore, they may value being reminded by an advertisement. This reminder effect of advertising could be important in many markets but is usually difficult to document. We study it in the context of buying a product that has existed for almost 300 years: a ticket for the Dutch State Lottery. This context is particularly suitable for our analysis because the product is simple, it is very well known, and there are multiple fixed and known purchase cycles per year. Moreover, radio and TV advertisements are designed explicitly to remind consumers to buy a lottery ticket before the draw. This can conveniently be done online. We develop an approach to distinguish reminder effects of advertising from other effects, such as conveying information about the size of the jackpot. The key idea is that reminder effects are short lived. We use minute-level advertising and online sales data and find that the reminder effect of advertising is strong. Reaching 1% of the population by a radio advertisement leads to an increase in online sales of 1.55% in the four hours after the advertisement is aired. For TV advertisements, the increase is 0.78%. We show that the effects generally last longer for radio advertisements. We also provide direct evidence that reminding consumers not only affects the timing of purchases but also leads to market expansion. Finally, we estimate a model of consumer behavior under limited attention to quantify the effect on total sales. We find that total sales would be 16.7% lower without the reminder effect of advertising and that shifting advertising to the week of the draw would lead to a 9.2% increase in sales. History: Puneet Manchanda served as the senior editor and Günter Hitsch served as associate editor for this article. Supplemental Material: A replication package with code and log files and an Online Appendix are available at https://doi.org/10.1287/mksc.2022.1405 .

The $2.43 Billion Question: Podcast Advertising in 2024

An immersive data story exploring podcast advertising trends and the breaking point where ads drive audiences away.

Cognitive Load and Social Media Advertising

Social media engagement requires cognitive resources, which subsequently impact the advertisements consumers see while browsing. For the most part, however, advertising practitioners and scholars s...

How Wikipedia Can Save the Internet With Advertising

Robin Berjon explores how principled advertising on Wikipedia could fund a democratic digital future.

Variety Effects in Mobile Advertising

Mobile app users are often exposed to a sequence of short-lived marketing interventions (e.g., ads) within each usage session. This study examines how an increase in the variety of ads shown in a session affects a user's response to the next ad. The authors leverage the quasi-experimental variation in ad assignment in their data and propose an empirical framework that accounts for different types of confounding to isolate the effects of a unit increase in variety. Across a series of models, the authors consistently show that an increase in ad variety in a session results in a higher response rate to the next ad: holding all else fixed, a unit increase in variety of the prior sequence of ads can increase the click-through rate on the next ad by approximately 13%. The authors then explore the underlying mechanism and document empirical evidence for an attention-based account. The article offers important managerial implications by identifying a source of interdependence across ad exposures that is often ignored in the design of advertising auctions. Furthermore, the attention-based mechanism suggests that platforms can incorporate real-time attention measures to help advertisers with targeting dynamics.

Dynamic Pricing: What It Is & Why It's Important | HBS Online

Are you reevaluating your digital platform’s pricing model? Here’s an overview of dynamic pricing and why it’s important to your business.

Selling the American People: Advertising, Optimization, and the Origins of Adtech

How marketers learned to dream of optimization and speak in the idiom of management science well before the widespread use of the Internet.Algorithms, data

Designing Information Provision Experiments

Information provision experiments allow researchers to test economic theories and answer policy-relevant questions by varying the information set available to respondents. We survey the emerging literature using information provision experiments in economics and discuss applications in macroeconomics, finance, political economy, public economics, labor economics, and health economics. We also discuss design considerations and provide best-practice recommendations on how to (i) measure beliefs; (ii) design the information intervention; (iii) measure belief updating; (iv) deal with potential confounds, such as experimenter demand effects; and (v) recruit respondents using online panels. We finally discuss typical effect sizes and provide sample size recommendations.

AI may fatally wound web’s ad model, warns Tim Berners-Lee

Web inventor warns reliance on AI agents threatens multibillion-dollar revenues for Google and Meta

An Instrumental Value for Data Production and its Application to Data Pricing

We develop a framework for capturing the instrumental value of data production processes, which accounts for two key factors: (a) the context of the agent’s decision-making; (b) how much data or information the buyer already possesses. We "micro-found" our data valuation function by establishing its connection to classic notions of signals and information design in economics. When instantiated in Bayesian linear regression, our value naturally corresponds to information gain. Applying our proposed data value in Bayesian linear regression for monopoly pricing, we show that if the seller can fully customize data production, she can extract the first-best revenue (i.e., full surplus) from any population of buyers, i.e., achieving first-degree price discrimination. If data can only be constructed from an existing data pool, this limits the seller’s ability to customize, and achieving first-best revenue becomes generally impossible. However, we design a mechanism that achieves seller revenue at most $\log(\kappa)$ less than the first-best, where $\kappa$ is the condition number associated with the data matrix. As a corollary, the seller extracts the first-best revenue in the multi-armed bandits special case.

Debunking the science of advertising

We delve into the world of advertising, worth hundreds of billions of dollars annually, to find out if it's really even that effective. A collection with 3 stories from The Correspondent.

Behavioral Economics and Marketing in Aid of Decision Making among the Poor

This article considers several aspects of the economic decision making of the poor from the perspective of behavioral economics, and it focuses on potential contributions from marketing. Among other things, the authors consider some relevant facets of the social and institutional environments in which the poor interact, and they review some behavioral patterns that are likely to arise in these contexts. A behaviorally more informed perspective can help make sense of what might otherwise be considered “puzzles” in the economic comportment of the poor. A behavioral analysis suggests that substantial welfare changes could result from relatively minor policy interventions, and insightful marketing may provide much needed help in the design of such interventions.