Choosy
Dynamic Effects of TV Ad Suspension on Keyword Search: Evidence from the U.S. Telecom Industry
Jia Liu, Shawndra Hill & David Rothschild
Journal of Marketing, forthcoming
Abstract:
This paper investigates the dynamic effects of temporarily suspending TV ads on online keyword search through a large-scale quasi-experiment in the U.S. wireless telecom industry. One top carrier, which spends stably around one million USD per day on TV advertising, halted its TV ads for a randomly selected week over our (6-month) study window. The primary challenges in this event study -- continuously changing treatment variables and establishing valid control groups to account for time-varying confounders -- are addressed using the generalized synthetic control estimator (GSC). Findings reveal significant immediate and lasting declines in the focal brand’s search volume, with reductions of 5-15% per day persisting for two weeks after TV ads resumed. The effects varied significantly across search categories: informational searches related to TV ad content experienced drops of up to 30% per day but recovered more quickly, while navigational searches showed smaller but more prolonged declines. Furthermore, the intervention had modest, short-lived spillover effects on three competitors. Interestingly, the suspension tended to hurt the competitor most similar to the focal brand, while benefiting leading competitors. These spillover effects were particularly pronounced in informational and channel searches, suggesting that competitors’ visibility was significantly affected by the focal brand’s absence.
The Token-Effort Effect: Trivial Redemption Effort Increases Price Promotion Effectiveness
Kuangjie Zhang et al.
Journal of Marketing Research, forthcoming
Abstract:
This research documents how introducing redemption tasks requiring a token (i.e., trivial) amount of effort -- for instance, by asking the consumer to enter a promo code or solve a CAPTCHA to receive a discount -- increases price promotion effectiveness compared to equivalent straight discounts (i.e., applied automatically). Eight studies (including two field experiments) and three additional web appendix studies provide robust evidence for the beneficial effect of token effort requirements on redemption rates. This effect occurs because the easy-to-attain redemption task induces a high perceived return on effort (ROE). As such, this effect only occurs when the redemption task requires token-type effort but not when it is effortful. This research offers costless and easy-to-implement managerial recommendations for boosting the promotional effectiveness of price promotions.
Haptic Rewards: How Mobile Vibrations Shape Reward Response and Consumer Choice
William Hampton & Christian Hildebrand
Journal of Consumer Research, forthcoming
Abstract:
People spend a large portion of their day interacting with vibrating mobile devices, yet how consumers psychologically respond to haptic feedback from these devices and their effect on consumer decision-making is largely unknown. Integrating recent work on human-computer interaction and reward processing, the current research examines: (1) the relationship between vibration duration and reward response, (2) to what extent rewarding vibrations influence consumer choice, (3) the process by which this effect occurs, and (4) how the effect differs compared to other forms of feedback (visual and audio). We find that mobile vibrations evoke a reward response that is distinct from other forms of feedback, which in turn boosts purchasing in online shopping environments (increased item adds and higher basket totals), and that impulsive consumers tend to be more responsive to mobile vibrations. We examine the impact of mobile vibrations on consumer decision-making in a variety of experimental settings, drawing on a diverse participant pool, leveraging both controlled experiments, and a country-wide field experiment to assess important boundary conditions. These findings have important implications for the ethical design of haptic interfaces in the marketplace and the role of mobile vibrations as a novel form of reward.
Mitigating the Negative Effects of Customer Anxiety by Facilitating Access to Human Contact
Michelle Kinch & Ryan Buell
Management Science, forthcoming
Abstract:
Prior research in social psychology has shown that when people feel anxious, they seek advice from others. Yet, companies that operate in high-anxiety settings (like financial services, healthcare, and education) are increasingly deploying self-service technologies (SSTs), through which anxious customers transact without access to human contact. These companies may therefore face a classic efficiency–service trade-off where gains in operational efficiency through automation also hamper service outcomes by neglecting customer anxiety. This paper, set in the high-anxiety domain of financial services, investigates the value of facilitating access to human contact during SST usage. In a field experiment conducted within the context of a credit union’s SST loan-approval process, an invitation to connect with a human loan agent increases the customer uptake rate of approved loans by 24%. Subsequent controlled laboratory experiments, which explicitly investigate the linkages among anxiety, choice satisfaction, and firm trust during SST encounters show that compared with participants without anxiety, those who are anxious consistently report lower satisfaction with their choices and less trust in the firm, regardless of the source of their anxiety. When anxiety is related to the SST encounter, facilitating access to human contact dampens anxiety’s negative effects on choice satisfaction and, by extension, increases firm trust. We further observe that these benefits of facilitating access to human contact arise even though very few customers choose to access a person. Taken together, this research reveals an opportunity for firms to maintain operational efficiency in high-anxiety self-service settings without compromising customer experiences and service outcomes.
The End of Tourist Traps: The Impact of Review Platforms on Quality Upgrading
Dante Donati
Marketing Science, forthcoming
Abstract:
Asymmetric information can distort market outcomes and harm welfare. This paper examines how cheaper access to review platforms affects consumer behavior and firms’ incentives to improve product quality in markets where information is traditionally limited. I first develop a consumer search model with firms making endogenous quality decisions. The model predicts that lower search costs shift demand toward higher-quality producers, raising firms’ incentives to upgrade quality, especially for firms selling ex ante lower-quality products. I then use online ratings as a proxy for reduced consumer search costs and estimate their impact on the restaurant industry in Rome, leveraging the abolition of mobile roaming charges in the European Union in 2017 for identification. Using a unique data set that combines monthly Tripadvisor information with administrative Social Security records, I find that revenues and total employment in higher-rated restaurants increased by 4%-10% after the internet price drop. The effects were particularly strong for less visible high-rated establishments, indicating a complementarity between ratings and navigation platforms. Meanwhile, the probability for lower-rated restaurants to exit the market doubled, while surviving lower-rated establishments hired workers with higher wages and better experience, ultimately improving their online reputation. These findings highlight the significant role of review platforms in mitigating asymmetric information and fostering quality upgrades.
The Impact of Green Energy Production on Healthiness Perceptions and Preferences
Iman Paul, Smaraki Mohanty & Jeffrey Parker
Journal of Consumer Research, forthcoming
Abstract:
This research finds that products that have been produced using renewable (“green”) energy, and labeled as such, are perceived to be healthier and, consequently, are more likely to be purchased than otherwise identical products produced with non-green or conventional energy. The effect of green energy production on the perceived healthiness of food products is found to be driven via perceived contagion: Consumers believe that the “good for you” essence of green energy is transferred to the food product during the production process, thereby rendering it healthier and more preferred. Evidence for this relationship is found across 8 studies (N = 1762) using a variety of common food products. Alternative accounts are assessed and ruled out, and it is also found that the impact of green energy production on preferences is moderated by consumers' health orientation. These findings contribute to the growing literature on the broader topic of sustainability initiatives and research examining the complexity and nuances of consumer responses to sustainable products and initiatives.