Linking Clicks to Bricks: Spillover Benefits of Online Advertising

Vibhanshu Abhishek, University of California, Irvine

While email ads allow firms to target consumers with promotions, are they effective in increasing offline revenues for firms that predominantly sell in brick-and-mortar stores? Vibhanshu Abhishek will present research that addresses this question, using a dataset from one of the largest U.S. retailers that links each consumer’s online behaviors to the item-level purchase records in physical stores. Using a doubly robust estimator (DRE) that incorporates nonparametric machine learning methods and that enables causal estimation on observational data, the researchers find that receiving email ads can increase a consumer’s spending in physical stores. Further, this effect is heterogeneous across consumer segments. These results suggest that receiving email ads from the retailer can generate awareness and remind the consumer of the retailer’s offerings, gradually increasing the consumer’s purchase probability in the retailer’s physical stores.

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