Mindshare
Flaunting Porsches or Paris? Comparing the Social Signaling Value of Experiential and Material Conspicuous Consumption
Wilson Merrell & Joshua Ackerman
Personality and Social Psychology Bulletin, forthcoming
Abstract:
Humans have always found ways to flaunt how they spend money. In studying this conspicuous consumption behavior, researchers have focused almost exclusively on one particular target of consumption -- material goods that are bought and physically owned. Here, we propose that a different, understudied target of conspicuous consumption -- experiential purchases -- offers unique social signaling value compared to material goods. Across experimenter-derived stimuli (Study 1a) and real-world instances of conspicuous consumption scraped from Instagram (Study 1b), we find that conspicuous experiences can convey status equivalently to, while simultaneously signaling warmth better than, conspicuous material purchases. This communal advantage is driven by higher levels of perceived intrinsic motivation afforded to conspicuous experiences (Study 2) and is only present when the experiences are consumed by others (Study 3). These findings broaden our understanding of status-based consumption processes and position conspicuous experiences as signaling tools with unique social features and value.
Generative AI and Personalized Video Advertisements
Anuj Kapoor & Madhav Kumar
Marketing Science, forthcoming
Abstract:
We study the effectiveness of personalized video advertisements created using generative artificial intelligence (GenAI). We run a mobile ad targeting field experiment on WhatsApp in partnership with a leading direct-to-consumer e-commerce brand that sells eco-friendly sustainable products. We randomize users into receiving ads from one of three targeting conditions: (1) GenAI-based personalized video ads, (2) personalized image ads, and (3) generic nonpersonalized video ads. The first group is our main treatment, and the latter two serve as baselines. In the personalized treatment conditions, ad content is tailored to individual purchase histories, whereas in the generic treatment condition, a uniform brand message is delivered to all users. Our results show that GenAI-based personalized video ads increase engagement by six to nine percentage points over the baselines. These gains are robust across consumer demographics such as gender and location. We use back-of-the-envelope calculations to highlight substantial cost savings and productivity benefits of GenAI-based personalized ad campaigns. We discuss the implications of our findings for businesses and policymakers while noting the potential variation in effectiveness and generalizability of GenAI applications across marketing contexts.
The Impact of Ad Length on Ad Effectiveness: Do Micro Ads Work?
Beth Fossen, Philip Kim & Inyoung Chae
Journal of Marketing, forthcoming
Abstract:
As media viewers shift expectations toward content and ads, advertisers are increasingly exploring micro ads. Yet, limited research has examined micro ads, especially on TV. This research uses a multimethod approach to investigate micro ad effectiveness on behavioral outcomes and, more broadly, provide insights into the relationship between ad length and ad effectiveness in the current media landscape. Analyzing observational data on retailers' TV advertising, web traffic, and online sales, the authors find that micro ads spur more immediate web traffic than longer ads. Micro and non-micro ads exhibit similar direct impacts on online sales, but micro ads can indirectly increase online sales more by driving increased traffic. Results from a field experiment using social media ads corroborate these findings, showing that micro ads outperform non-micro ads in driving web traffic and social media engagement. The analyses suggest that viewer impatience for longer ads may be a plausible mechanism that explains why micro ads see increased effectiveness. The findings offer timely insights for advertisers and ad platforms seeking economical, attractive ad inventory.
Is the Money Spent on Short-Form Video Social Platforms Worth It? The Role of Advertising Spillover in a Large-Scale Randomized Field Experiment on ByteDance
Yitian (Sky) Liang et al.
Marketing Science, forthcoming
Abstract:
Short-form videos have taken over social media and attracted attention from advertisers. But doubts remain about the advertising efficacy on these platforms. In a large-scale randomized experiment on ByteDance, we show that advertising spillover plays a pivotal role in the advertising campaign. Most of the advertising effect comes from advertising spillover beyond ByteDance with exposed users being eight times more likely to convert from outside than from within ByteDance. When considering advertising spillover outside ByteDance, the average cost per conversion, which brands commonly use to evaluate the cost of campaigns, shrinks by 5 or 25 times, depending on the methods used to calculate it. Advertising spillover can also affect a brand's targeting strategy. Whereas commonly used demographic variables by the automobile brand are effective for target marketing with only platform data, they are not when considering advertising spillover outside ByteDance. Instead, a behavioral variable proposed herein (prior brand home page visits) effectively moderates the advertising effect but has no impact when ignoring advertising spillover in the analysis. Our findings underscore the importance of information sharing between platforms and brands, which in practice is typically not the case.
The Life you Save (for): Experiences Dominate Goods in Motivating Savings
Siyuan Yin et al.
University of Pennsylvania Working Paper, February 2025
Abstract:
Prior research suggests that when consumers think about spending, experiences tend to take priority over goods. But does this experiential dominance extend to motivation to save, which requires long-term planning and constant motivation to achieve their goal in the future? Across two field studies and six preregistered experiments, consumers are more motivated to initiate a savings goal, save toward, and protect their progress toward experiential versus material goals. Further, analyses of real saving behavior further support experiential dominance in success rates and persistence in streaks. We suggest that this effect arises because consumers perceive experiential goals as more versatile, which can be adapted to satisfy more needs and better accommodate the uncertain preferences of their future selves. Supporting this account, we demonstrate that the effect of experiential (versus material) goals is stronger over a longer goal period and is less subject to goal gradient effects. Further, we reveal the effect is moderated by goal specificity. Together, these findings demonstrate that goals that are either related to or framed in terms of experiences better motivate savings, making both the encouragement of experiential goals and experiential framing a useful tool for policymakers, researchers, and consumers focusing on promoting saving and improving financial well-being.
The seller cost effect
Tao Wang et al.
Experimental Psychology, May 2025, Pages 14-26
Abstract:
Cost plays a crucial role in commodity transactions, influencing the decisions of both buyers and sellers. Previous studies have focused either on the impact of seller costs on seller decisions or the influence of buyer costs on buyer decisions. However, it remains unclear whether seller costs directly affect buyers' purchasing decisions. Across six experiments, participants consistently demonstrated a preference for items with higher seller costs. Experiment 1 had them choose between high and low seller cost items that were totally equal in other aspects, with a majority favoring the item with high seller cost. Experiment 2 involved participants pricing items, resulting in higher values for those with greater seller costs. In Experiment 3, when asked to predict others' choices, the consensus was again for high seller cost items. Experiment 4, which used a single reseller, showed a similar pattern. Finally, in Experiments 5 and 6, with stricter experimental design, the preference for higher seller cost items persisted. These findings indicate that irrelevant factors can influence consumers' valuation of products and their consumption decisions, and thus challenge traditional utility theories of decisions, which generally accommodate only relevant factors. Several nondecision theories (price unfairness perception, anti-profit belief, and zero-sum thinking) were also tested, and zero-sum thinking provides the best explanation.