Events

Prof. Sha Yang
Ernest Hahn Professor of Marketing
Professor of Marketing
Marshall School of Business
University of Southern California

ABSTRACT

A multi-product ad (MPA) allows an ad platform to show multiple product ads within a single ad unit. Compared to single-product ads, MPA delivers multiple ads simultaneously and thus proposes new challenges for researchers to capture consumers’ ad consumption behavior. First, ads of similar products from the same category are likely to attract more consumer attention but induce satiation. Second, there is interdependence among different ad categories. Our research is the first to comprehensively examine both within-category satiation and cross-category preference interdependence within MPA, and explores implications for advertisers and ad platforms. We use an extended multiple discrete-continuous model that accommodates substitutability/complementarity, combined with a multi-choice model to study consumer responses to MPA. Additionally, we model the platform’s ad allocation and advertisers’ bidding decisions. Our findings reveal two consumer segments with varying satiation levels in the MPA context, with complementarity existing between different categories for these segments. Through two counterfactuals, enabled by the modeling of both demand and supply, we demonstrate the value of our proposed framework in designing ad variety amidst consumer within-category satiation and cross-category interdependence. The results uncover a misalignment of welfare implications of ad variety for consumers, advertisers, and the ad platform in multi-product display advertising, offering profound insights into when ad variety benefits or hinders one or multiple stakeholders.