Advertising Especially Influences Older Users: Experimental Measurement of Effects on Retail Purchases

Does advertising measurably affect sales? New technologies for tracking individuals' sales and ad exposure facilitate studying a nationwide retailer's online brand advertising effectiveness. A controlled experiment on 1,577,256 existing customers measures the causal effect of advertising on purchases, overcoming the attribution problem by exogenously varying ad exposure. The advertising produced a statistically and economically significant effect on in-store sales. The experiment permits a demographic breakdown. Surprisingly, the effects are large for the elderly. Customers aged 65+, comprising only 5% of customers, increased purchases by 20% due to the advertising. This represented 40% of the total effect among all ages.

 

First version: 16 January 2009

This version: 3 November 2012

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