Stanford GSB Unveils Research on Effects of Spillover in Online Ads
Research published in the Journal of Marketing Research by Stanford Graduate School of Business (GSB) Associate Professor of Marketing Navdeep Sahni reveals how “spillover” from online advertising can inadvertently give a leg up to a rival company, according to this recent article.
Sahni says “spillover” often occurs when “consumers who see an ad make mental associations beyond their impression of the brand that’s being advertised.” Sahni set up “11 randomized field experiments” in which he was able to track the click-through patterns of 189,650 users of an Indian restaurant review site across four months.
Sahni discovered that any ad the site ran “increased the sales leads of individual competitors by an average of 4 percent” and cumulatively increased “competitors’ sales [at] about 5x the increase in the advertiser’s sales.”
Sahni’s research indicated that the companies, which received boosts of up to 25 percent, “offered menus similar to the advertiser’s” and were rated highly by the site’s users. Spillover had little to no perceived effect on well-known restaurants that “offered menus like the advertiser’s.”
One surefire way advertisers can reduce the effects of spillover, according to Sahni, is to “beat the competitors that your ad reminds people of.” He adds that advertisers ought to rethink “the content of their ads, emphasize what distinguishes their eatery from their competitors, [and] consider what their customers value.”
Sahni also recommends that advertisers maximize exposure to banner ads, as he found “no evidence of spillovers among customers who were exposed to an ad more than three times.”
About the Author
Jonathan Pfeffer
Jonathan Pfeffer joined the Clear Admit and MetroMBA teams in 2015 after spending several years as an arts/culture writer, editor, and radio producer. In addition to his role as contributing writer at MetroMBA and contributing editor at Clear Admit, he is co-founder and lead producer of the Clear Admit MBA Admissions Podcast. He holds a BA in Film/Video, Ethnomusicology, and Media Studies from Oberlin College.
